The benchmark stock indices have dropped by over 1% this morning after the overnight sell-off in US stocks.Finance Minister Nirmala Sitharaman has urged public sector banks to roll out loan resolution schemes by 15 September.Join us as we follow the top business news through the day.11:00 AMUnprecedented inverse correlation between GDP and stocks
10:40 AMModern slavery risks surge for Asian garment workers with coronavirusYet another unintended consequence of coronavirus lockdowns in the developing world.Reuters reports: “The risk of modern slavery in Asian manufacturing hubs has surged and is set to worsen with the economic impact of the new coronavirus, increased labour rights violations and poor law enforcement, a global index found on Friday.For the first time, India and Bangladesh were in the ”extreme risk” category, joining China and Myanmar in a group of 32 countries with the worst risk of slave labour, the Modern Slavery index by risk analytics company Verisk Maplecroft found.The risks faced by workers in Cambodia and Vietnam also rose to their highest in four years, taking 32nd and 35th places in the ranking of 198 countries which identified North Korea, Yemen and Syria as the three worst nations for slave labour.“What makes the situation even more alarming is that modern slavery risks are set to intensify as countries grapple with the economic fallout of the pandemic,” said Sofia Nazalya, a human rights Analyst at Verisk Maplecroft.“As more workers are pushed into the informal sector, they will be at greater risk of facing more exploitative forms of work, some of which could amount to forced labour conditions,” she told the Thomson Reuters Foundation in emailed comments.Asian garment workers supplying global fashion brands lost up to $5.8 billion in wages from March to May, the Clean Clothes Campaign pressure group said last month, as the COVID-19 pandemic led to store closures and cancelled orders.About 60 million people work in Asia’s garment industry and falling sales have put many jobs at risk. Laid-off workers are likely to turn to exploitative jobs or may put their children to work to cope with the loss of earnings, industry experts say.“Even in the same jobs, the conditions have become more exploitative,” said Apoorva Kaiwar, Regional Secretary for South Asia at IndustriALL Global Union, a federation that represents workers in 140 countries.“Our affiliates have reported wage cuts in existing jobs as well as removal of facilities such as transport and canteen with subsidised food. For those who have lost jobs, they are unable to find jobs with comparable wages and benefits.”Travel restrictions and measures to reduce the spread of COVID-19 have made it harder for companies to carry out audits to ensure ethical working practices in their supply chains, said the slavery index, which aims to help businesses identify risk.“The reputational risk to brands from association with modern slavery is … now higher than at any other time over recent years,” said Nazalya.”10:20 AMNo such proposal before the board: VIL on reports of investment by Verizon, AmazonThe denial comes after reports yesterday that Amazon and Verizon may invest more than $4 billion in Vodafone-India.PTI reports: “Amid reports suggesting that Verizon and Amazon may invest over USD 4 billion in the company, Vodafone Idea on Thursday said while it constantly evaluates various opportunities as part of corporate strategy, there is no such proposal currently before its board.As and when various proposals are considered by the board warranting disclosures, the company will comply with the disclosure obligations under the SEBI rules, Vodafone Idea said in a regulatory filing.“As part of corporate strategy, the company constantly evaluates various opportunities for enhancing the stakeholders’ value…Currently, there is no proposal as reported by the media that is being considered at the board,” VIL said.The VIL filing came after BSE sought clarification from the company on Thursday over a media report suggesting that Verizon and Amazon could invest over USD 4 billion in Vodafone Idea.“We wish to reiterate and clarify the company will comply with SEBI listing regulations and duly keep the stock exchanges informed of all the price sensitive information,” VIL added.It is pertinent to mention here that the Vodafone Idea board is scheduled to hold a crucial meeting on Friday to consider fund-raising through various means.The development comes following the Supreme Court verdict directing all telecom operators to pay 10 per cent of total Adjusted Gross Revenue (AGR)-related dues this year, and rest of the payments in 10 instalments starting from next fiscal year.Vodafone Idea has AGR dues of over Rs 58,000 crore, of which the company has paid Rs 7,854 crore to the Department of Telecom so far.In a filing earlier this week, the company had said that the board at its meeting will “consider and evaluate any and all proposals for raising of funds in one or more tranches by way of a public issue, preferential allotment, private placement, including a qualified institutions placement or through any other permissible mode and/or combination thereof…by way of issue of equity shares or by way of issue of any instruments.”The board will also consider raising funds through securities including securities convertible into equity shares, global depository receipts, American depository receipts or bonds including foreign currency convertible bonds, convertible debentures, warrants, and/or non-convertible debentures including non-convertible debentures along with warrants, which may or may not be listed, it said.”10:00 AMIndian shares drop after Wall Street selloff; financials weighA sharp fall in Indian stocks as volatility picks up in bourses across the world. Reuters reports: “Indian shares fell sharply on Friday, tracking Asian peers that dropped after a selloff in high-flying technology stocks on Wall Street, with financials and conglomerate Reliance Industries Ltd also weighing on the markets.By 0347 GMT, the blue-chip NSE Nifty 50 index fell 1.55% to 11,348.60, while the S&P BSE Sensex slid 1.49% to 38,413.36.MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.6% after Wall Street’ main indexes marked their deepest one-day declines since June.In Mumbai, losses were broad based, with all stocks on the Nifty trading lower.The Nifty bank index fell 2.3% after India’s top court on Thursday directed banks not to declare any loans that were standard as of end-August as non-performing until further orders, raising uncertainty over recovery efforts. HDFC Bank Ltd was among the top drags on the Nifty, falling 1.8%Also dragging the Nifty was India’s most valuable company, Reliance Industries Ltd, which fell 1.2%.”
9:30 AMNirmala gives banks September 15 deadline to roll out loan resolution schemes Lenders must not use coronavirus (COVID-19) related distress as a factor to determine borrowers’ creditworthiness, Union Finance Minister Nirmala Sitharaman told top bankers on Thursday. She directed them to roll out loan resolution schemes by September 15, aiming to maximise relief before the start of the festive season, according to a Finance Ministry statement.Ms. Sitharaman’s meeting via video-conference with the heads of commercial banks and non-banking financial companies was aimed at reviewing their state of preparedness for implementing the loans resolution framework for COVID-19 related stress.Last month, Reserve Bank of India gave permission for one-time restructuring of corporate and retail loans without classifying them as non-performing assets, in a bid to help borrowers tide over the pandemic-related economic crisis.