Idices see biggest single day drop in 5 years

The global market slowdown caused by the corona virus hit the Indian markets on Friday, with benchmark indices suffering their worst single day decline in 5 years. The Sensex dropped 1448 points or 3.6 percent to end at 38297 the lowest close since October 14, 2019. The Nifty dropped 414 points or 3.6 percent to close at 11219. The rupee value has also fallen by 0.9 percent at RS 73.17 against the US dollar; this is the lowest drop in seven months. The sensex ended the week with 7 percent loss its worst since December 2009.

As on Friday 28 February 2020, more than 83000 people have been affected by the Corona virus in 53 countries. In the past few weeks the disease has been reported across different countries outside China. The Brent crude oil fell 12 percent over the week and ended the week at $50.8 per barrel. The spread of virus has led to closing of schools in Japan, In Iran Friday prayers were cancelled and Saudi pilgrims were barred from holistic sites. Last time such was the a virus hit china was in 2003, which was the ‘SARS’ but at that time china was not as big of an economy as today, it was not embedded in the global supply chain and the size of the global trade was smaller. According to Shankar Sharma founder of first global “even if spreads are contained, restoring normalcy would take months”.

Many brokers have lowered their earnings forecast after the lower global growth in coming quarters. Morgan Stanley has listed 3 scenarios that could happen. The brokerage says if the virus could be contained in the first quarter and if China returns to normal by the end of the month, the disruptions will be limited. The second scenario is that new cases arise in other parts of the world; in this case global growth would average 2.4 percent YOY in first half of 2020, before picking up in third quarter. And if the outbreaks persist till September it will lead to recession as it will encompass all large economies.

Electronic goods set to get expensive amid short supplies from virus hit China.

Consumer electronics retailers are planning to increase the prices of refrigerators, air conditioners, microwave ovens and washing machines in March due to higher product costs amid short supplies from coronavirus-hit China.

All major manufacturers including LG, Voltas, Samsung, Haier and Panasonic have decided to increase prices across models by 3-5 per cent. That means an Rs 3,000-4,000 price hike for affordable and large capacity models.

"Due to lower demand in China, component prices have risen, and shipping costs are rising too. The budget also raised tariffs on certain products by 2.5%. Keeping these into account, we are passing on some of it, "said Pradeep Bakshi, Voltas managing director. His company is the largest manufacturer of AC in India.

The budget increased the import duty on compressors for refrigerators and air conditioners from 10% to 12.5%. The import tax on motors used in washing machines and other goods has risen from 7.5% to 10%.

Sales executives at India’s two largest appliances makers, LG and Samsung, have informed key trade partners of a 3-4% price hike for microwave ovens and washing machines from next week. Prices of refrigerators and ACs will be increased after that.

LG and Samsung did not respond to an email seeking comment till press time Wednesday.

Voltas, owned by the Tata Group, would hike AC rates by 3 percent from March and Bakshi said in May he will review the situation again. Panasonic is planning a similar hike for ACs but is tracking other items in the case. Haier would raise prices for AC and refrigerator by up to 2.5-5%.

Eric Braganza, president of Haier Appliances India, said product factories in China were working at around half their capacity. "There is still not much certainty when suppliers of materials are going to normalise," he added.

Last week, these firms had decided to raise television rates by 7-10 percent from March due to a 15-20 percent spike in the main component, the LED TV screen. At the moment, only Daikin had announced also a price hike for ACs.

According to a recent report from ICICI Securities, the Indian electronics industry is considering a few alternate locations for product sourcing, such as Thailand, Malaysia and Vietnam. But this, combined with higher air freight costs to shorten lead time, would inflate part and finished product cost by 5-6 per cent that would be passed on to consumers, the study said.

Govt’s new rules seek moredisclosures in audit reports

The Government on Wednesday issued new norms and rules for the audit and the auditors seeking the work.This move from Government came due the corporate scams arised in the past years and times.A specific format has been now prescribed by the Government and the audit work which has done is to be varified by an external auditor who represents the Government. The main auditor will be liable if he fails to answer the Government's auditor doubts and clarifications.The rules also ask for the company proceedings on behold of the binami properties under the company.The auditor has to report whether there is any fraud happened in the company which he is to be audited.If there is a fraudulent work has been found. The actual nature of work is to be noticed and directed to the prescribed authority in charge. Auditors said the new norms are regulated but the company's can still make fraudulent works behind them.Auditors have to report the term loans which are taken by the company. For what purpose it was taken and used for.CARO 2020 would delegate the due diligence and work of the audit.Cash losses during the financial year and the fiscal year has to be notified and presented if any. An auditor is accountable for all the objections raised by the Government and their representatives.This act by Government will reduce the scams and auditing fraud works happening in the corporate world. This have been increasing in a  manner which cannot be controlled in the future. Thus the Government take precautions for making a end to these activities. But these laws and norms are to be followed well and regulations have to be maintained.To usher in transparency these laws are to be followed. The auditors need be to strict and vigilante by all terms.

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WALMART- PHONEPE RECEIVED FRESH FUND

Walmart -owned digital payments firm phonepe received Rs 427 cr from singapore based holding company.

        The funding is expected to help the company to take chance against the rivalry competition from Alibaba backed paytm,Google pay and Amazon pay. phonepe has received large chunk of 

  share for funding since Walmart acquisition of Flipkart in 2019.During 2018,2019 phone received over $700 million in funding .The Banglore based company is investing about $800 cr in this year on their marketing activities.major chunk of it  will go for television ads .and an equaly big proportion will spent on ground over 300 cities.

According to Walmart international CEO Judith MCkenna Phonepe's ambition is to be India's largest transaction plantform anchored in payments.The firm which has 200 million registered users and 20 million active users witnesses 500 million monthly transactions .The company also witnessed total payment value(tpv) of $180 billion and has 10 million merchants.                                              

Voda Idea to govt: Set off Rs.8K-cr GST credits against AGR Duties  

The company has so far paid Rs.3500 Cr. in AGR duties.Its self assessment showed that the firm was required to pay a total of Rs.23000 cr, of which Rs.7000 Cr. is the principal amount. The DoT calculation of Voda Idea's  AGR dues is estimated at more than Rs.50000 CR. out of a total  bill of Rs.1.47 trillion to be paid by some 16 telecoms, many of which have gone of business.

                                         In 2016 the government had fixed the spectrum usage charge (SUC) at 3 per cent for future actions and decided to allow a weighted average formula for all existing spectrum allocations with a floor of 3per cent. Now Vodafone Idea wants SUC to be reduced to 1 per cent from the current 3 per cent. 

"The root cause of the financial stress has been the below -cost pricing of the telecom services forced by competitive pressures.There was some increase in market prices in 2019, but that's far from enough to over costs. Further increase in price is unlikely without a floor price regulation,"the company said. Pressing for a floor price, a concept that is being considered by the Telecom Regulatory Authority of India,Vodafone Idea said it must be immediately made effective with elements such as fixed connectivity charge as well as outgoing voice and data price.Currently, telecom tariff is under forbearance.

“YOUR CORPORATE EMAIL ISN'T AS SAFE AS YOU THINK “

The discovery of an alleged international ring of fraudsters started with a one-l in  email. In April 2019,a company accountant received an email that appeared to be from the chief executive officer. “Joanna, can you mail out a check to a vendor today? Barbara,”the email said.

The mail had some hallmarks of a scam .But it also had a an unique attributes that in trigged cyber security experts at the company’s email security provider , Agari Data Inc. Using a fake email account posting as the company accountant, Agarisent back a reply .

“Hi Barbara , Yes ,of  course . Please send me the details for the payment,”the reply said .

Over the next several months , Agari said it was able to unravel what’s known as a business email compromise operation. Agari dubbed the group sending the email Exaggerated Lion, and said its members were based in Nigeria, Ghana and Kenya. Between April and august 2019,

Exaggerated Lion targeted over 3000 people at nearly 2100 companies , all in the US .

Similar email attacks are growing problem in the US, according to the latest FBI report.

In its simplest forms, a business email compromise operator will send an email posing as the CEO to an accounts payable department with an urgent request to transfer funds or fulfill a fake invoice.

In another example, payroll representative will receive an email appearing to be from an employee requesting to update their direct deposit information-often to a prepaid card account .

Companies often realize something is amiss only when its too late .

As the fake relationship progresses, mules are asked to launder larger sums of money.

Once an unsuspecting business parts with its cash, through a paper cheque or wire transfer ,Exaggerated Lions’s mules have a variety of ways to get the money back to them.

LOT OF CHEMISTRY ,BUT LITTLE MATHS

US president  Donald trump’s 36 hour visit to India starting from 24^th February did not see any deadlock broken on the bilateral trade deal. However there were several discussions regarding the tariffs, terrorism, and religious tolerance in India and some major deals were signed by both the parties which would definitely strengthen the us India relationship in the future.

At the press conference US  president confirmed the two sides signed 3 billion dollar worth of defence deals, with India’s military to purchase apache and mh-0 rome helicopters. The two sides signed three other agreements, including those on the safety of medical devices and energy cooperation between Indian Oil Corporation, Exxon Mobil India LNG, and Chart Industries. Later in the day, at an interaction with the media, he hoped to bridge the $16.9-billion trade deficit his country had with India and appreciated investment by Indian business in the US.

The president also mentioned the high tariff import policy adopted by india  and mentioned the US  need to be treated fairly. At a briefing with industrialists in India at the US Embassy, Trump spoke of the importance of a secure 5G wireless network and the need for this emerging technology to be a “tool for freedom, progress, prosperity, not to do anything with where it could be even conceived as a conduit for suppression and censorship”. Trump said India and the US were keen to revitalise the Quadrilateral Initiative (Quad), which also comprises Australia and Japan. Foreign Secretary Harsh Vardhan Shringla said Modi and Trump decided to move towards what was referred to as a “big deal” in trade. He said the two leaders had decided to conclude the ongoing discussions on bilateral trade as soon as possible and give it a legal framework and the text could be finalised with legal vetting as soon as possible. “There is appreciation that trade has increased year-on-year over the last few years. US exports to India have increased dramatically and there is a noticeable decline in the trade imbalance,” Shringla said. He said the trade imbalance was eroding with a greater number of acquisitions in oil and gas and the purchase of commercial aircraft. Indian officials said the contentious, amended Citizenship Act did not come up for discussion during the meeting of the two leaders, and they talked about religious harmony in a positive way.

NFRA to serve notice on Deloitte in IFIN case

NFRA to serve notice on Deloitte in IFIN case

                 

The NFRA (National Financial Regulatory Authority) has initiated disciplinary action against Deloitte Haskins & Sells (DHS) for making lapses in its audits of IL&FS Financial Services (IFIN).

The gaps found in audit report are as follows:

·       - Failure to comply with standards of auditing.

·   - Didn’t question the going concern assumption based on which financial statements were made.

·       - Independence of auditor compromised.

·     -   Non-audit services provided at high fee without approval.

·        -Incorrectly certified accounts showing positive net owned funds and CRAR.

The regulatory body had said in an audit quality review report that quality control systems and processes at DHS were “severely inadequate and ineffective. The first step would be to issue a show cause notice to the audit company, before any action is taken.

NFRA said the auditor did not display the required professional doubts. It accepted the management stand about not disclosing that net owned funds and the capital to risk-assets ratio of IFIN as of March 31,2018 were negative, and that this situation would lead to the cancellation of the company’s license to operate as a non-banking financial company. Instead DHS accepted the explanations of the management and certified these ratios as positive.

NFRA has been given powers to issue orders imposing monetary penalty and debarring an individual member or firm registered with Institute of Chartered Accountants of India (ICAI) for 6 months to 10 years for professional or any other misconduct.

Deloitte India did not wish to comment on the matter.They have said that they performed audits in accordance with applicable laws, regulations and professional standards in India.The authority is also likely to come up with a supplementary report that have not been covered.

Sanofi India hits record high, surges 9% on dividend of Rs 349 per share

The total dividend of Rs 343 per share includes a one-time special dividend of Rs 243 per equity share for the year ended December 31, 2019.

Shares of Sanofi India hit a record high of Rs 7,638, surging 9 per cent, on the BSE on Wednesday after the pharmaceutical company announced a total dividend of Rs 349 per share.

“The Board has recommended a dividend of Rs 106 per equity share of Rs 10 for the year ended December 31, 2019. In addition, after reviewing the cash requirements for the Company's operations, a one-time special dividend of Rs 243 per equity share is being recommended,” Sanofi India said in exchange filing.The total dividend of Rs 349 per equity share will be paid after approval of shareholders at the ensuing Annual General Meeting scheduled on April 28, 2020. The final as well as one-time special dividend, if approved by the shareholders, will be paid on or after May 5, 2020, it added. In September 2019, the drug maker India had sold its Ankleshwar manufacturing plant to European pharmaceutical company Zentiva for Rs 261 crore as a part of its long-term strategy. Sanofi had said it would use the sale proceeds for further business development and to reward shareholders. The transaction is expected to close by March 31, 2020 and the products which are not part of the 'Zentiva portfolio' will continue to remain with the Company, the company said on Tuesday. Meanwhile, the company reported a 38.5 per cent year on year (YoY) growth in profit before exceptional item and tax at Rs 181.2 crore for the December quarter, as against Rs 130.8 crore logged in the year ago quarter. Operational revenue grew 13.7 per cent at Rs 826.3 crore on YoY basis. Besides, in a separate regulatory filing, Sanofi India informed that Thomas Rouckout, non-executive director of the company has stepped down as director of the company. “Thomas Rouckout informed the Company vide his letter dated 25th February 2020 that he has taken up a new role within Sanofi Group and would not be able to spend time on Sanofi business in India,” it added. In the past one month, Sanofi India has outperformed the market by gaining 15 per cent, as compared to a 4 per cent decline in the S&P BSE Sensex.At 09:33 am, the stock partially erased its early morning gains and was trading 3 per cent higher at Rs 7,197 on the BSE. In comparison to the latter the S&P BSE Sensex was down 0.62 per cent at 40,028 points. A combined 56,146 shares have changed hands on the counter on the NSE and BSE so far.

Technology Flavours the click and bait game at Zomato and Swiggy

                Technology flavours the click and bait game at Zomato, Swiggy.

Internet has made phenomenal changes in the food habits of the people in the country. At an earlier stage , let say 2011, I used to ask my brother ,who praises Internet for every single matters that “will Internet provide you food when you are hungry?” He says No, because it was not possible at that time. But today Large number of people are depending on online food stores as Internet has fulfilled that need too .

 Zomato and Swiggy who are the key online giants of the food sites, are competing each other in such a way that they provide the services with much similarity. The 4 billion online food delivery space in the country is a two horse race today where they have the same customer base with similar promises and offerings. The online food business has been made a rapid growth in the customer behaviour. Since this is a differentiated service to the customers they have become the key drivers of the market. Both the online food delivering giants are in run to make their customers more loyal to their fare and increase the frequency of usage of the customers to their sites.

The company itself said that the technology initiatives lead in the past years has drastically helped them today. The Swiggy Initiative BrandWorks, who has partnered with  some existing restaurants provide a differential experience to the customers which  will attract the customers towards the app.

According to the recent reports of Google and Boston Consulting Group , they have stated that food technology is the fastest growing ecommerce segment and this has increased 6 times more from 2017 to 2019. It is said that food tech business has the most mature set of consumers in the digital universe and they are the one who have high expectations from foodtech players. To support the growth, there are 5 key factors and they are- Deep personalisation, Focused marketing, Increased quality assurance, Constant value for money , Advanced convenience features.

Both the online sites, Swiggy and Zomato provide high technological support to the customers. They provide all the technological services from ordering the food till the delivery of food. These are done with keeping a eye on customers to the future and to be stable with the competition

INDIA’S STRATEGIC RELATIONSHIP WITH THE US MATTERS THE MOST !!

" INDIA’S STRATEGIC RELATIONSHIP WITH THE US MATTERS THE MOST "


US President Donald Trump’s first visit to India, also the first standalone visit by any US president to the Indo-US relationship has evolved into India’s most consequential strategic partnership. As foreign secretary Harsh Shringla said recently, whether in countering terrorism or ensuring a peaceful Indo-Pacific, India and US have unprecedented convergence of interests.


The two countries have more than 50 bilateral inter governmental dialogue mechanism for exchange of views on issues of mutual interest, many of them at the ministerial level.


While defence and counter-terror cooperation has dominated headlines in the recent past, relations are equally robust in other are as like science and technology, space , energy, education, diaspora and regional and international cooperation.


The scope of the relationship has a large people to people component .”The size of the Indian diaspora in the US is estimated at around 4 million with a million of NRIs. There are more than 200000 India students in the US. There is comprehensive engagement among our academics, science, professionals and other stakeholders,” said shringla last week.


According to MEA, both countries are collaborating and coordinating on a number of regional an global issues in both securities as well development spheres. They are also engaged in areas such as maritime and cyber security, humanitarian efforts . The US has expressed support for the India’s permanent membership on a reformed United Nations Security council and for India’s early membership in the Nuclear Suppliers Group.

BSNL, MTNL USERS PUT ON HOLD AS VRS HITS SERVICE

BSNL, MTNL USERS PUT ON HOLD AS VRS  HITS SERVICE

The VRS (Voluntary Retirement Scheme) has reduced workforce and it is also hitting the service quality. MTNL(Mahanagar Telephone Nigam) is other state owned telco like BSNL that operates only in Delhi and Mumbai. Around 75 percent of MTNL staff took the VRS  offer and left recently. An angry Mumbaikar said that company does not  have the manpower to attend to complaints.

Vinod Desai, who is an Ahmadabad based retired bank official said that he has been visiting the BSNL office for the last two moths to complain about his dead landline connection. Around 65 percent of BSNL employees leave after accepting VRS package. Geo Vargheese who is  businessman has seen that the internet speed of the BSNL broadband is really unsatisfactory.  Another guy from Hyderabad has said that BSNL officers are taking too time to respond than before, to service complaints.

P K Puurwar, chairman and managing director of BSNL said that the existing employees are fighting against this challenging situation. Of the total number of employees who took VRS from both BSNL and MTNL are non executive staffs. BSNL and MTNL have shed 92869 at one go through VRS. A BSNL executive said that however the overall impact of VRS on company operations was minimal.

They are planning for outsourcing for future, and company officials said that the outsourced partners will manage copper lines for landline connections. Majority of people who opted for VRS  are among the group c staff who used to maintain these copper lines. The maintenance of optic fiber network will also be outsources, said official of Gujarat circle.

At BSNL offices in Hyderabad, officers managing the post VRS situation have redeployed staff from back end administrative work at customer service centers. Managing the customer service centers and handling of fault rectification are our priority,said a senior BSNL executive. He also added that they are trying to ensure the least possible disruption at this challenging difficult stage.  The impact is even seen at the centers where BSNL has subsidiaries.

Bhanu Kiran Chakraborty, a retired Damodar Valley official has said that the quality of voice services as well as data speed has been falling for the past two years even before the VRS was offered. The government plans to monetize MTNL and BSNL asset worth Rs 37500 crore over a period of three years to raise the resources of retiring debt and to meet the operational fund requirement.

Building Resilience Against Climate Change

The term “Climate change” should be taken very seriously by now because the impacts of the Climate Change are worsening the situations of the economy. In the human History it is been spiralling as year by year It’s enlarging its Intensity. Every year we record the highest temperature and these records are broken year after year. By this time we are not improving in area related to the Climate change. The climate is changing but not us. Things are already getting worse by the Forest Fires to the increasing Frequency and intensity of storms, to the blistering cold waves and spiralling Heat.

We have to understand the fact as the Climate Change is Real ; this is first and mostly affected to the poor and they are more marginalised. The Farmers and the other people who work in land, use water and make livelihood are very much affected. They are not the only contributors for the problem but yet they suffer more. But it is clear that their pain would definitely make the economy insecure. Since the changes are not remarkable we need to act Now and the Earliest.

Government work so hard to build up the Infrastructure and the “not so natural” calamities washes everything off and these are rebuild. Houses and other personal belongings are washed away, roads and infrastructure are destroyed. Instead of rebuilding why don’t the government try to solve the base problem . Without searching and solving out the cause we will have to invest our time and money in Rebuilding process only. 

Flood and Drought are not just about the climate change. We have to understand the fact that drought occurs due to the mismanagement of Water resources and flood is all about the sheer inability to plan for Drainage ; for our lack of concern to protect the forests on watershed or the near criminal act of Building and destroying the flood plains.

The 2019 IPCC report have stated that modern agricultural methods practices for being over-chemicalised and over- industrialisation have increased in Greenhouse emissions. All these would make the poor poorer and their impoverishment and marginalisation will add will add to their desperation to move away from their land sand seek alternative livelihood. The only way option for them is to leave their places and migrate to other states or country.

The Ultimate solution for all these we can do is Growing Trees , which would reduce the heat level , curb emissions of greenhouse gases, improving soil health captures carbon dioxide. Most Importantly we should try to change the agricultural practises too. 

We should invest in were we not only withstand the calamity but overcome it the next time. For this we have to seriously think on creating ecological assets. In the nutshell we have to not only focus in our business but also look upon the environment and help it to survive . We should not only focus to maximize our wealth but also build wealth for the poorest and improve their livelihood.

US surpasses China as India's biggest trading partner

The US has surpassed China to become India's top trading partner. In FY 2018-19, the bilateral trade between the US and India stood at $87.95 billion while Chinese trade aggregated at $87.07 billion. In FY 2019-20 the trade with US was at 68 million for the period April-December, China only had 65 million during the same time period. This is according to new data published by the ministry of commerce. Pundits believe that this will be a common trend in the years to come, as discussions between New Delhi and Washington are focused on deepening relations. How the upcoming 2020 elections will affect these bilateral ties are as yet unpredictable.

               With the upcoming Trump visit, rumours of an FTA (Free Trade Agreement) to be finalised is spreading like wildfire. This will be extremely beneficial for India as the US is the biggest market for domestic goods and services. The Federation of Indian Export organisations Director General Ajay Sahai said "FTA with US will be very beneficial for India as the US is the biggest market for domestic goods and services,". According to him that India's exports as well as imports are increasing with the US, while with China both are declining. India has a huge trade deficit with China but trade with America is flush with surplus. In 2018-19, India had a deficit of $53.56 billion with China while America had a trade surplus of USD 16.85 billion.

               An FTA will include reduction in high tariffs set by India as well easier mobility for Indian professionals, both important issues for the economy. Lower tariffs have the potential to choke local sellers but at the same time, overall quality of any consumer product is likely to see improvement. The agriculture industry is likely to face heavy competition if the proposed talks follow through, as Indian farmers would be unable to compete with the scale of US exports. Export of Steel might see a major improvement giving new life to the declining steel trade.

               India wants cuts in visa fees, exemptions from high duties imposed by the US on steel and aluminium products, and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering. On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items, medical devices, and data localisation, and a cut on import duties on some information and communication technology products.