Emerging market FX pickup exposed to reversal after new virus surge: Report

The real, the rouble and the rupee are on the spot as infections of Covid-19, the illness caused by the virus, pile up in Brazil, Russia and India.

Emerging market currencies will likely give back recent gains if a resurgence of the coronavirus pandemic continues in the second half of the year, driving foreign exchange flows to the safer US dollar, a Reuters poll of market strategists showed.
The real, the rouble and the rupee are on the spot as infections of Covid-19, the illness caused by the virus, pile up in Brazil, Russia and India, the nations with the highest case counts in the world after the United States.

The outlook for these emerging economies keeps worsening due to the unrelenting health crisis, with Brasilia engulfed in political rows, the Kremlin tightening its grip and Indian cities suffering from a lack of adequate infrastructure.

Over 90%, 63 of 68 respondents in the June 25-July 1 Reuters poll said a second shock from the pandemic would boost the dollar, as in March, when anxious investors dashing for the greenback dealt EM FX its steepest loss since May 2012, according to an MSCI index.

"A second wave of the Covid-19 pandemic represents the major risk," said Roberto Mialich, FX strategist at UniCredit. "If so, we can expect investors to stay in the greenback or even increase their long exposure."

He added emerging market currencies would bear most of the brunt in the event that investors and traders became defensive once again. But he said global conditions would gradually improve, meaning less exposure to the dollar.

Breathe easy: 40% drop in Sulphur Dioxide concentration in air across India

The observations are significant as India was in 2019 named the world's largest emitter of SO2.

Sulphur Dioxide (SO2) concentration, an air pollutant released by the burning of fossil fuels, reduced across India by almost 40 per cent when the country was shut down for more than two months to contain the coronavirus pandemic, data released by the European Space Agency (ESA) shows.

ESA’s observations show SO2 concentration in Delhi fell when coal-fired power plants and industries shut down for the lockdown, which started on March 24 and now has been eased off. While power plants across the country ceased entirely, some in the states of Odisha, Jharkhand, and Chhattisgarh maintained a substantial level of activity.

The observations are significant as India was in 2019 named the world’s largest emitter of SO2. India’s emissions have increased in the last 10 years, leading to haze and poor air quality in cities including national capital New Delhi.

Coal-based power plants and oil refineries are responsible for two-thirds of the anthropogenic SO2 emissions. “The country ranking shows India as the top emitter of SO2 in the world, contributing more than 15 per cent of the global anthropogenic SO2 emissions,” said Greenpeace in a 2019 report.

"We have experienced a reduction in Sulphur dioxide, however, this is temporary and it's not going to benefit in the long run. We should not forget that because of the drastic fall in consumption in the industrial and commercial categories, the power demand has also gone down during the lockdown. This reduction in SO2 could be achieved in the long run with cleaner energy sources," said Avinash Chanchal, Senior Climate and Energy Campaigner for Greenpeace India.

US firms filing for bankruptcy at fastest pace since 2013: Report

During the last financial crisis, there were 8,614 company bankruptcies in the US in 2008, and the number rose to 12,644 in 2009, according to the report.

US companies were filing for bankruptcy at the fastest pace since 2013 as the fallout from the COVID-19 pandemic continues to ripple through the country, a media report said.

Citing data from legal services group Epiq, The Financial Times report said on Tuesday that a total of 3,427 companies have filed for Chapter 11 bankruptcy in the US this year, close to the 3,491 filings during the first half of 2008, reported China's Xinhua news agency.

"The data stand in contrast to an improving economic backdrop following hefty central bank support across the globe and economies starting to reopen," the report said, noting the pain already inflicted by the global pandemic is too much for some companies to recover from.

"It is very difficult for these companies to operate in a near zero-revenue environment," Sudeep Kesh, head of credit market research at S&P Global Ratings, was quoted as saying in the report.

"They are facing a lot of pressure."

During the last financial crisis, there were 8,614 company bankruptcies in the US in 2008, and the number rose to 12,644 in 2009, according to the report.

The report came as the Paycheck Protection Program (PPP), a US government aid program intended to help small businesses retain their employees during the COVID-19 crisis, was set to close on Tuesday with more than $130 billion left unused.

Treasury Secretary Steven Mnuchin said on Tuesday that President Donald Trump's administration supports legislation to repurpose the remaining funds in the PPP.

United Spirits case: Sebi slaps Rs 3 cr penalty for insider trading

Markets regulator Sebi on Tuesday imposed a penalty totalling more than Rs 3 crore on three persons for insider trading activities in the shares of United Spirits Ltd.

Markets regulator Sebi on Tuesday imposed a penalty totalling more than Rs 3 crore on three persons for insider trading activities in the shares of United Spirits Ltd.
The watchdog has slapped a fine of Rs 1.32 crore on Poonam Haresh Jashnani, Rs 93.24 lakh on Haresh Parmanand Jashnani and Rs 80.76 lakh on Varun Haresh Jashnani.

An investigation was carried out with respect to the scrip of United Spirits Ltd (USL) for the period from January to April, 2014 as well as into the possible violation of norms by these three persons.

Sebi found that Jananis indulged in insider trading activity in USL shares on the basis of information passed by Nishant Gupte, who was the global business development manager (mergers and acquisitions) at Diageo.

He was in possession of Unpublished Price Sensitive Information (UPSI) relating to the open offer for acquisition of shares of United Spirits by Relay BV, together with Diageo Plc as the person acting in concert.

Gupte, who is the son-in-law of Haresh and Poonam and husband of Varun's sister, was part of the core team which represented Diageo/PAC in the transaction to consolidate shareholding of the acquirer in USL and was guiding the team since the beginning of the transaction lifecycle.

In three separate orders, Sebi said trades of Haresh, Varun and Poonam showed a strong preponderance of probability that they were executed when they were in possession of UPSI.

Safe bet: Five reasons that will lead gold to all-time high price

Indian households supposedly hold 25,000 tonnes of gold valued at Rs.121.5 trillion, or almost 60 per cent of India's GDP.

Gold price hit $1800 in New York's Comex Futures and appear headed for an all-time high level of $1900 in the international market, lifted by investors seeking a safe bet as the world battles coronavirus pandemic .

In India, prices calculated with 3 per cent Goods and Service Tax (GST) crossed Rs. 50,000 per 10-gram mark. Silver in Futures on MCX is trading at Rs 50,300 (without GST). In 2011, gold reached above $1900 and then fell sharply to consolidate at lower levels for years after falling to near $1,000. Gold usually has a price cycle of 8-10 years and after consolidating for years it has entered a bull cycle.

“Gold continues to have plenty of upside from current levels. We expect prices to come close to the 2011 peak of $1,921, although that level may not be breached this year," said Metal Focus, a London-based bullion and metal research firm.

"This may not to be a straight line rally and there will be periods of liquidations which will potentially take it to levels as low as $1,600. Investors should buy at such. That will make such dips short lived. Overall, we forecast the gold price will average $1,700 in 2020, up 22% year-on-year,” said Metal Focus.

Gold averaged $1,647 per ounce in 2020. The price rally this year has made Indian investors holding gold for the last 12 months richer by Rs 36.5 trillion. In the last 12 months, gold price in India has increased by 43 per cent to trade in the physical market at around Rs 48,600 per 10 gram. Indian households supposedly hold 25,000 tonnes of gold valued at Rs.121.5 trillion, or almost 60 per cent of India’s GDP.

Covid-19 crisis: Banking credit shrinks 1.7% in May as lockdown bites

According to Reserve Bank of India (RBI) data, gross bank credit was down to Rs 91.08 trillion in May, from Rs 92.63 trillion in March.

Bank credit covering all segments — agriculture, industry, services, retail, and priority — shrunk by 1.7 per cent in May, compared to March. May was the second full month of the nationwide lockdown.

According to Reserve Bank of India (RBI) data, gross bank credit was down to Rs 91.08 trillion in May, from Rs 92.63 trillion in March.

On a year-on-year (YoY) basis, gross bank credit growth decelerated to 7 per cent in May 2020, from 11.5 per cent in May 2019, the RBI said in a statement.

Loans to industry — large, medium, small and micro — declined by 1.5 per cent in the two months to Rs 28.61 trillion in May. The micro and small segment showed a 7.6 per cent slump, medium size a decline of 5.4 per cent, and large segment a fall of 0.4 per cent.

The retail segment, covering categories like housing, credit cards, and vehicle loans, contracted 2.9 per cent (Rs 74,790 crore) in the two months. The outstanding retail credit stood at Rs 24.78 trillion. Credit card outstanding — a key segment of the retail category — declined by 14.1 per cent to Rs 96,978 crore in May, compared to Rs 1.08 trillion in March.

The housing loan portfolio also shrunk by 0.7 per cent to Rs 13.29 trillion in May, from Rs 13.38 trillion in March.

Bankers said the June quarter is usually lean, and this year the lockdown has only added to demand (for credit) woes. There has been some traction in credit following resumption in economic activity in some belts, albeit on a lower scale. Demand for working capital from the emergency credit line, however, has improved in June.

BookMyShow checks in to India's crowded streaming party with live events

Sunburn Home Festival, the virtual edition of the electronic dance music festival, is among the first events BookMyShow Online will stream live.

In the streaming video rush comes a new creature this week: BookMyShow (BMS) Online is a streaming platform for live events. Sunburn Home Festival, the virtual edition of Asia’s biggest electronic dance music festival, is among the first events it will stream live on July 10-11. You can pay Rs 99 for a day or Rs 199 for both days.

BMS Online also conducts a virtual musical talent discovery show with Kailash Kher as judge. The finalé will be streamed live on July 7. Other upcoming events include the India shows of Doncaster (South Yorkshire) band Bang Bang Romeo and London-based band Electric Enemy. There are theatre workshops with veterans like Puneet Issar, Rohini Hattangadi, Rakesh Bedi, and Anant Mahadevan. These are among the first of many concerts, events, and workshops lined up by India’s largest ticketing portal in its bid to ride out the pandemic storm.

In a normal year, BMS sells 200 million tickets of movies, plays, and other events. “We have always been the de-facto place for consumers to discover out-of-home,” says Albert Almeida, chief operating officer, BMS.

To stay connected with its user base during the lockdown, BMS began “delivering content and experiences at home”, says Almeida. It facilitated the discovery, registration, and reach for over 750 events, such as Live From HQ (music, comedy, spoken word), Theatre Live (drama, monologues, theatre, reading), Vodafone #RechargeForGood (music), among others. Close to 4 million people saw these events in the first month of the lockdown, claims the firm. Currently close to half a million viewers log into these virtual events every week. Note that all of these were free. “We saw great affinity for comedy, music, international artistes, and upskilling through master classes,” says Almeida.

Armed with these insights, BMS started moving some of these events to pay in the latter part of June. Now about two-thirds all such events are behind paywall. With BMS Online, everything is pay.