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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

June 08, 2021 / 08:12 AM IST

Below is a shortlist of all the important articles from newspapers.

Delhi air quality takes a hit as city reclaims roads

On day 1 of the partial unlock in the Nationa Capital, parts of Delhi reported traffic snarls resulting real-time pollution levels shooting up, says The Times of India report.

How bad it is: Delhi’s air quality index on Sunday stood at 134, it slumped to 180 on Monday.

A combination of dust uplift, winds and an increase in traffic is likely to lead to a further spike in pollution in the next 24 hours.

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Govt’s new Covid prescription drops many ‘common’ drugs

The Union health ministry has issued an evidence-based treatment plan for Covid-19 patients, junking many medicines that had become household names during the course of the pandemic and achieved record sales, says The Times of India.

What drugs are out: Antiviral favipiravir is out. The other antiviral, remdesivir, has been recommended only on prescription by a “senior doctor” as it is an “experimental drug with a potential to harm”.

Common antibiotics like azithromycin and doxycycline are missing from the list. So it ivermectin, the antiparasitic drug for filariasis. Best-sellers like zinc supplements and vitamins A, B, C and D are also not mentioned.

Why it is important: The new policy change will not only save lives, but also reduce costs for patients. Since the pandemic started, most Covid-19 patients in India got a prescription of six to eight medicines.

The guidelines mention four medicines as necessary for severe Covid patients: Oxygen, steroids, tocilizumab (not all but based on certain blood parameters) and anticoagulants for those with comorbidities like diabetes, hypertension, etc.

The guidelines make it clear that medicines are meant only for moderately or severely ill Covid-19 patients who need hospitalisation.

For those with mild Covid, only medicines to reduce fever and cough are advised.

Max Life, Tata AIA make vaccination must for term life

Insurers Max Life and Tata AIA are making it mandatory for Covid-19 vaccine certificates for buyers of term life insurance, the Economic Times reported.

How it is important: This will prompt other insurers to follow suit to reduce future claims payouts, but depriving cover to those who have not yet been inoculated.

Max Life is issuing term covers to people over the age of 45 only if they are vaccinated.

Tata AIA is issuing policies irrespective of age even to those who have received their first shot.

The move will help insurers tighten risk management, thereby saving the insurer from increased claims burden in the event of a third wave.

Such an enquiry process could also help companies differentiate policyholders that are by nature “vaccine-hesitant,” and enforce higher levels of scrutiny for them.

The flip side: This will negatively impact people who have not been inoculated yet due to the shortage of vaccines

In cases where a final vaccination certificate is sought, a person will have to wait for 84 days before he can take the second shot.

As of Sunday, only 23 crore people had taken their first shot in a country of 1.38 billion.

Hindujas to develop high-end realty, hospitality projects globally

The Hinduja Group is venturing into development of super-premium real estate and hospitality assets in international markets, the Economic Times reported.

What the plans are: The group is eyeing iconic global locations and trophy assets.

To begin with, the group has partnered with international luxury hospitality major Raffles Hotels & Resorts to operate and manage branded residences and a luxury flagship hotel at Winston Churchill’s iconic Old War Office building in London.

The group has spent over £1.2 billion on this project.

The building has over 1,000 rooms and two-and-a-half miles of corridors.

Hinduja Group bought this project over £350 million in 2014.

Covid recovery to determine the positive outlook for India: Morgan Stanley

Morgan Stanley’s head of global equities, in an interview with the Economic Times said the next wave of foreign capital into India will be into the upcoming share issuances by new-age technology or healthcare companies.

The main take: He said they are positive about India, but the positivity is conditional on the next three months showing continued progress on Covid.

The market could be viewed as expensive, but expensive again is in the context of the kind of growth you expect to see over the next 12-24 months.

If Covid is controlled, then the economy is going to grow north of 10% in the next year, and 7-8% the year after.

If earnings are up 25-30%, then it kind of justifies the multiples. If Covid extends into the September and December quarter, then there’s a real possibility of a meaningful correction.

In India, the market-cap creation in technology or healthcare hasn’t been that significant unlike in the US and China.

There are 10-15 large-cap companies that will now come to the market over the next 12-18 months and will be between $5 billion and $20 billion in market cap. They will attract the next wave of capital into India.

The US Fed is unlikely to hike rates till very late into 2023.

Equities offer best risk-reward in the current environment: Validus Wealth CIO

Downgrades to EPS growth forecasts and hyper-inflation are the biggest risks for Indian equities, says Rajesh Cheruvu, chief investment officer, Validus Wealth, in an interview with Business Standard.

His takes: He said that a quicker-than-expected reversal in easy monetary conditions could sap the liquidity that has elevated asset price valuations.

Equity markets are always forward-looking and tend to move on from transient economic disruptions quickly.

But when valuations are as stretched as at present, corporates have no space for mistakes in business performance and earnings delivery.

Though the two-year forward EPS (earnings per share) growth is still healthy, the possibility of a return of localised lockdowns and uncertainty over the government´s ability to quickly inoculate a large mass of the population have led to the financial year 2021-22 real GDP growth downgrades from 12-13 per cent YoY to 8-10 per cent.

As States unlock, companies still unsure of calling back employees

Private companies are in no hurry to bring back employees to offices, even as States begin to ease lockdown restrictions says Economic Times.

Who started unlocking: Delhi, Uttar Pradesh, Haryana and Maharashtra and more States are expected to join them in the coming weeks.

Cautious companies: They are cautious because Covid-19 in the second wave was more infectious and deadlier, and there is the prediction of a third.

The safety and health of employees is the topmost priority and will wait till there is more clarity on the pandemic situation.

Saint-Gobain isn’t reopening offices at least this month.

KPMG, too, will take a call on bringing back employees to offices only next month.

Executives at Nestle, Dabur, Capgemini, PepsiCo India, Publicis Sapient, Genpact, American Express and Kimberly-Clark India also said that they would continue with work from home for now for the office staff.

The hybrid model is increasingly being favoured by companies as well.

Tata Steel, Schneider Electric and Tata Consultancy have already announced that they would continue with the flexi-work model even after the situation returned to normal.

The scene is slightly different at banks. Factories, too, are looking to resume or scale up operations at the earliest.

Company registrations stay the course during second wave

The second wave of the covid-19 pandemic had little effect on entrepreneurship, says Mint report.

But the first wave had a huge impact.

The number says it: Incorporation of companies indicates intent to invest, though actual economic activity may be influenced by a lot of factors.

In April, 12,554 companies were set up in the country, compared with the 3,209 set up in the same month a year ago when a national lockdown was in place to contain the covid-19 pandemic.

In March 2021, the number of companies set up had risen to 17,324 when compared with the 5,788 set up in March last year.

The March 2021 figure is the highest since January 2013 and is despite the mobility restrictions imposed in various parts of the country.

In January and February this year, the number of companies incorporated were in double digits, at 10,924 and 14,094, respectively.

Who they are: Large state economies account for the bulk of companies registered every month.

Maharashtra led the field with the formation of close to 2,300 companies. The state, along with Delhi, Uttar Pradesh, Karnataka, Tamil Nadu, and Telangana, accounted for 60% of the companies incorporated in April.

Among sectors, services accounted for 63% of all companies set up in April.

Companies set up in the agriculture and allied services segment in April accounted for 7% of all new companies.

PE majors continue to lap up malls despite covid-led pain

Large global investors such as Singapore state investor GIC, Canada Pension Plan Investment Board, and private equity firm Blackstone are buying into malls, attracted by their long-term potential and reasonable valuations, Mint says.

Why it is so: Better valuations and lure of long-term returns from retail real estate are major attractions.

Things are going to normalize, and people will come back to retail outlets for various activities.

As the work-from-home theme has picked up, people will need more places where they can go for recreation.

Who they are: CPPIB recently formed a JV with The Phoenix Mills Ltd for a mall project in Kolkata, investing ₹560 crore and committing another ₹400 crore for its platform with Phoenix Mills.

GIC had agreed to invest ₹1,111 crore for about 24% in a set of Phoenix Mills assets and plans to raise it to 35% with an additional ₹400 crore of investment.

In October, Blackstone agreed to buy nine malls and office assets from Prestige Estates Projects for ₹10,500 crore.

Data protection bill: Prasad, panel members spar overdraft report

Union minister for electronics and information technology Ravi Shankar Prasad on Monday clarified that the joint parliamentary committee examining the personal data protection bill is yet to submit its report, hours after Congress leader Jairam Ramesh said that panel members were yet to see a draft, says Hindustan Times report.

Ramesh’s party colleague and panel member Manish Tewari also hit out at the delays in the finalisation of the report.

The deliberations of the committee have resulted in some very “serious differences” between the original bill and draft report.

The report that is likely to be finalised is going to be very different from the original bill that the committee set out to debate, sources said.

BJP’s Meenakshi Lekhi also expressed her different views.

The 20-member committee was set up in 2019 to review the Personal Data Protection Bill, which was introduced in the 17th Lok Sabha.

India may have lost 3% of its GDP due to global warming

India may have already lost 3% of its GDP on account of global warming of 1 degree Celsius over pre-industrial levels, and risks losing 10% of its GDP in the extreme scenario of a 3 degree Celsius increase, Hindustan Times says.

How it is important: The rise would lead to a rise in sea levels, a decline in agricultural productivity, and increased health expenditure, according to a report by London think tank ODI.

India’s GDP would currently be around 25% higher were it not for the costs of global warming, and predicts that with 3 degree C of warming it is likely to be 90% lower by the end of the century than it would have been otherwise.

Average temperatures across India rose by 0.62 degree C over the last 100 years, rising at a slower rate than the global average, but the impact of the climate crisis is felt almost every year.

Air traffic recovery likely by third quarter: IndiGo

IndiGo, India´s largest airline, is expecting a recovery in domestic traffic by the third quarter of FY22, says the Business Standard.

However, the airline expects a longer recovery period for international traffic, which it expects to normalise by Q4.

In February, passenger traffic had almost reached 80 per cent before the second wave.

The company saw a decline in March and this accelerated in April and May.

But saw a modest turnaround at the end of May, which has continued in June.

The company said that it would not pay any dividend for FY21.

The firm will slow the delivery of new aircraft but will increase the pace of return of older A320 Ceo aircraft.

Equities offer best risk-reward in current environment: Validus Wealth CIO

Downgrades to EPS growth forecasts and hyper-inflation are the biggest risks for Indian equities, says Rajesh Cheruvu, chief investment officer, Validus Wealth, in an interview with Business Standard.

His takes: He said that a quicker-than-expected reversal in easy monetary conditions could sap the liquidity that has elevated asset price valuations.

Equity markets are always forward-looking and tend to move on from transient economic disruptions quickly.

But when valuations are as stretched as at present, corporates have no space for mistakes in business performance and earnings delivery.

Though the two-year forward EPS (earnings per share) growth is still healthy, the possibility of a return of localised lockdowns and uncertainty over the government´s ability to quickly inoculate a large mass of the population have led to financial year 2021-22 real GDP growth downgrades from 12-13 per cent YoY to 8-10 per cent.
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