Midnight News Update – Jun 22nd 2020
Hetero Drugs of Hyderabad has secured approval from the Indian pharma regulator for the manufacture and marketing of Remdesivir, belonging to Gilead Inc of the US. Hetero was one of the licensees in India to manufacture Remdesivir, apart from Cipla and Jubilant Life. It will be marketed under the name of Covifor in India and each vial is expected to cost around Rs.5000. The company is likely to prioritize distribution in states like Maharashtra and Delhi, which are the worst affected by the pandemic. In India there are at least 10,000 patients who need this drug urgently and it can be a life saver in the fight.
Foreign portfolio investors or FPIs have infused Rs.17,985 crore into Indian equities in the month of June till date. The infusion was over Rs.20,527 crore in the first two weeks of the month and there was net selling by FPIs in the third week due to uncertainty over the Indo-China border situation. FPIs had been net sellers in the months of March, April and May but the massive infusion of liquidity by central banks results in risk-on flows into emerging markets in June and India was one of the key beneficiaries. FPI flows were prominent into selected sectors like personal products, telecom and hydrocarbons space.
In the light of the post-COVID cash crunch, ONGC has decided to optimize some of its capital outlays. In the March quarter, ONGC got hit by tepid oil prices as also many refiners using the Force Majeure clause to reduce off-take of crude oil. Even natural gas output suffered due to lower demand as city gas suppliers also reduced their off-take due to limited demand. ONGC has also stated that the supply chain constraints imposed by the COVID-19 lockdown has resulted in the completion dates of many projects being put off. Labour shortfalls are also implementing the pace of completion of expansion projects.
The government has stated that nearly 42 crore Indians had received assistance from the government under the Garib Kalyan Package and the total outlay for the same had been closer to Rs.65,454 crore. The package was announced in March this year to provide free food grains and cash payment to women as well as to poor senior citizens and farmers. A part of this allocation was also front loaded towards payment of the first instalment of the PM-Kisan minimum income initiative. Three instalments of around Rs.10,000 crore have already been credited to the bank accounts of women under Jan Dhan scheme.
The rally in the stock markets on Thursday and Friday was a lot stronger than anticipated and resulted in the top 10 stocks on the Nifty adding nearly Rs.176,500 crore to the overall market capitalization of the stock exchange. The big gainer was Reliance which benefited by getting closer to its zero net-debt status. During the week, RIL market cap grew by Rs.108,213 crore as its overall market crossed $150 billion. Among the others, HDFC Bank gained Rs.27,788 crore while ICICI Bank gained 12,729 crore. HDFC also gained nearly Rs.8110 crore while Bharti was another major gainer with Rs.6300 crore. During the week, Infosys, TCS and Kotak Bank jointly added Rs.13,000 crore to the market cap. Among the losers, ITC lost Rs.12,169 crore in market cap while HUL lost Rs.3277 crore as FMCG came under pressure.
As the Boycott China calls reach a crescendo, Indian auto manufacturers have protested that Indian producers would find it impossible to manage without Chinese supply chains. Indian auto industry is worth $120 billion annually and it sources nearly 15-20% of its components from China. According to Rajiv Bajaj, China offers in terms of price, speed and flexibility. Bajaj Auto, for example, sources alloy wheels and transmission wheels from China worth Rs.1000 crore. Despite the 10% duty on Chinese products, it still works out 15% cheaper than the locally produced products in the category.
Midnight News Update – Jun 22nd 2020