Isro conducts Chandrayaan-2 Moon lander's deorbit manoeuvre successfully

After successfully separating India's first Moon lander, Vikram, on Monday, the Indian Space Research Organisation (Isro) conducted its first deorbit manoeuvre successfully on Tuesday. The manoeuvre began at 0850 hours and had a duration of 4 seconds.

Isro officials said that after Tuesday's deorbit manoeuvre, the lander had achieved a 109 x 120 km orbit around the Moon.

One more deorbit manoeuvre will be conducted on Wednesday and the orbit that the lander will achieve after this will be 39 X 110 km. The effort is to soft-land the lander in the South polar region of the Moon between two craters -- Manzinus C and Simpelius N -- on September 7, 2019.

Deorbiting manoeuvres involve the firing of the spacecraft's engines to slow down its pace and bring it closer to the Moon's surface.

Earlier, Isro Chairman K Sivan said that using deorbiting manoeuvres, the space agency would rotate the lander to the opposite side and burn all the five engines for a short while to reduce the distance between the lander and the Moon's surface, before rotating it back to the previous position. In the second deorbiting manoeuvre, the agency will once again rotate the lander to the opposite side and conduct a small burn of the engines to further bring down the orbit. 

The lander will then make a powered descent to the Moon's surface in the unexplored south pole on September 7.

Sivan said that the powered descent will be carried out in a 15-minute window between 0130 hours and 0230 hours IST on September 7, through which Vikram will touch down on the surface of the Moon.

"The manoeuvre was considered critical because it marks an important phase of the lunar landing process of Chandrayaan-2 and even a minute hurdle during this manoeuvre could have an impact on the whole mission," said Sivan.

After Vikram's touchdown, the rover, Pragyan, will roll down from the former to carry out the research for which it was designed. Even after the separation of Vikram, the orbiter will continue to fly around the Moon.

On July 22, the Rs 978-crore Chandrayaan-2 was launched into space by India's heavy-lift rocket, the Geosynchronous Satellite Launch Vehicle-Mark III (GSLV Mk III), in a textbook style mission from Isro's spaceport at Sriharikota, near Chennai. Chandrayaan-2's total journey is estimated to be around 384,000 km. 

The lander and rover will carry out experiments to find water on the lunar surface and map for chemicals and topography. Isro has said that extensive mapping of the lunar surface to study variations in surface composition is essential to trace back the origin and evolution of the Moon.

The findings of these experiments will be helpful not only for India's future missions, but also for other missions, including NASA's, said Sivan, who added that past missions, including China's, were carried out close to the Equator.

The first data from the rover, Pragyan, will come through about 5.8 hours after landing.

While the battery will be exhausted after 14 days, if other systems are intact, once the next lunar day begins, the rover and lander could recharge their power systems and resume their work. However, Sivan said, "We cannot assure you that it will happen."

Economists predict deeper interest-rate cuts, slow economic growth

Economists have cut their forecasts for India’s economic growth and predicted deeper interest-rate cuts after data showed a sharper-than-expected slump in output.

Goldman Sachs Group and Citigroup lowered their growth projections to 6 per cent for the fiscal year, while Oxford Economics said there’s a risk the expansion could be weaker than that.

GDP rose 5 per cent in the June quarter from a year ago, the slowest pace in six years and lower than all the forecasts in a Bloomberg survey of economists. The weakness was broad-based, with consumption and export growth slowing.

According to the UBS India financial conditions index, the sluggish growth has dampened demand, capital expenditure and export outlook of firms, and the future recovery cycle will be “elongated and below market expectations”. It said growth may have reached a trough -- or a low turning point of a business cycle -- in the June quarter.

Bank merger will slow down loan growth, rivals likely to benefit: Analysts

Equity analysts predict that India’s move to merge several of its state banks will slow their loan growth, and many brokers advise buying shares of the lenders’ rivals who stand to benefit from the uncertainty.

While the mergers will reduce the number of state-owned banks to 12 from 27 and are aimed at creating bigger and healthier lenders, the time needed for integration and challenges related to staff, branch and process overlaps are expected to be the main immediate risks.

Prime Minister Narendra Modi’s government late Friday surprised analysts by announcing a series of mergers that will create four new lenders that will hold business worth Rs 55.8 trillion ($781 billion), or about 56 per cent of the Indian banking industry. The announcement came minutes before data showed economic growth in Asia’s third-biggest economy slumped to a six-year low of 5 per cent, below the weakest estimate of 39 economists polled by Bloomberg.

Futures contracts on India’s Nifty 50 Index dropped 1 per cent in Singapore on Monday, when local markets were shut, indicating the broader stock market may decline when they open for trade on Tuesday.

Here is what some of the analysts are saying:

Caution on Merger Candidates

Mergers will keep state-run banks “busy in the integration process for a prolonged period and thus help private banks further consolidate their business market share,” Emkay Global analysts Anand Dama and Rahul Malani wrote in a note dated Sept. 3. Emkay downgrades Indian Bank to hold from buy, and maintains sell on Punjab National Bank, Canara Bank and Union Bank, citing merger overhang. The analysts retain buy on SBI and a positive bias toward private banks, with ICICI Bank and HDFC Bank as top picks among large stocks.

Value Lies Outside

“Consolidation comes with its own set of challenges in HR, process integration, branch rationalization,” analysts led by Kunal Shah at Edelweiss Securities Ltd. in Mumbai, wrote in an investor note on Friday. “Ideally, value lies in places outside the involved banks and within this space, we like State Bank of India as it is better positioned to grow,” they wrote.

Loan Growth Slows

“We have observed that historically, when state-owned banks merge, smaller banks’ loan-book growth slows sharply, as the primary focus of management shifts to integration,” Vishal Goyal and Ishank Kumar, analysts at UBS Securities India Pvt., said in a note on Saturday. ICICI Bank Ltd. and Axis Bank Ltd. remain UBS’s most-preferred picks.

Smaller Lenders Lose

The mergers may not be favorable for the smaller lenders based on the share-swap ratios decided in past state-owned bank combinations, analysts led by Adarsh Parasrampuria at Nomura Financial Advisory & Securities (India) Pvt., wrote in a note on Saturday. “We continue to prefer private corporate banks such as ICICI and Axis Bank and we see value in State Bank, where merger-related uncertainty will not be there.”

Deepen Credit Crunch

“Consolidation is a good long-term move, but could weigh on near-term growth and potentially worsen the credit crunch,” analysts led by Sumeet Kariwala at Morgan Stanley wrote in a note on Monday. The brokerage remains underweight on Punjab National Bank and Canara Bank.

Credit Growth Pangs

Mergers are “unlikely to revive credit growth,” Credit Suisse Group AG’s analysts Ashish Gupta and Kush Shah wrote in a note on Monday. “Given the limited flexibility on restructuring and rationalization, meaningful cost synergies from PSU bank mergers are unlikely,“ the note added.

Strengthening the System

Citigroup Inc. said the mergers “are significant and should strengthen the banking system in the medium to long term.” Fewer banks will mean the government’s capital infusion will be concentrated and will aid in talent management, analysts including Manish Shukla wrote in a note, upgrading shares of Bank of Baroda Ltd. to buy from neutral.

Faster Bad-Loan Resolution

“Near-term impacts could potentially be slower growth but faster NPL resolution, while medium-term impacts could include lower lending spreads in segments where SOE banks are market leaders,” Goldman Sachs Group Inc. analyst Rahul Jain wrote in a note.

Fintech committee recommends new legal framework for consumer protection

A panel on issues related to financial technology (fintech), in its report submitted to Finance Minister Nirmala Sitharaman on Monday, has recommended a new legal framework for consumer protection.

The framework encompasses fintech and digital services, a National Digital Land Records Mission, a unified database (stacks) for small industries and the agriculture sector, removing discriminatory regulatory barriers in digital payments infrastructure, and allowing non-banking financial companies (NBFCs) into agriculture credit.

The Steering Committee on fintech-related issues has also suggested cash flow-based financing for micro, small and medium enterprises (MSMEs); using drones and remote sensing to assess risk in agriculture credit and insurance; increasing the use of artificial intelligence among state-owned banks; and regulatory and legislative changes to enable fixed deposits and other financial instruments to be issued in dematerialised form and allowing their frictionless use as collateral.

Several proposals in the report are in line with the government’s intention to create and maintain central databases for different sectors. A similar proposal was put up in the recently proposed national digital health blueprint, to create a HealthStack. The panel also recommends using blockchain, which was also one of the main suggestions of a committee on digital currency. The fintech panel was announced by former finance minister Arun Jaitley in his 2018-19 Budget.

Fintech committee recommends new legal framework for consumer protection

The panel is headed by the secretary to the Department of Economic Affairs and includes the secretary to the Ministry of Electronics and Information Technology, secretary to the Department of Financial Services, secretary to the Ministry of Micro, Small and Medium Enterprises, chairperson of the Central Board of Indirect Taxes and Customs, chief executive officer of Unique Identification Authority of India, and a deputy governor of the Reserve Bank of India.

“The report outlines the current landscape in the fintech space globally and in India, studies various issues relating to its development, and makes recommendations focusing on how fintech can be leveraged to enhance the financial inclusion of MSMEs with a view to making fintech-related regulations more flexible and generate enhanced entrepreneurship,” said an official statement by the finance ministry after the report was submitted. The key areas on which the panel made its recommendations include agriculture, banks, NBFCs, small and medium industries, artificial intelligence (AI), Aadhaar, and know-your-customer (KYC) norms.

The panel has recommended using video-based KYC and validated documents through DigiLocker as alternatives to Aadhaar-based KYC, and said there should be no charges for uploading KYC data, though downloads can be priced. It has said financial-sector regulators should set deadlines for on-boarding the existing KYC data to the central KYC registry.

“Given the rapid pace at which technology is being adopted primarily by private sector financial services, the committee recommends the Department of Financial Services to work with (public sector) banks to bring in more efficiency to their work and reduce fraud and security risks. Significant opportunities can be explored to increase the levels of automation using AI, cognitive analytics and machine learning in their back-end processes,” the statement said.

The panel has recommended adopting regulation technology (or RegTech) and use-cases by all financial-sector regulators, making compliance with regulations easier, quicker, and effective.

ISO forecasts global sugar deficit of nearly 5 mn tonnes in 2019-20

The International Sugar Organization (ISO) on Monday forecast a global sugar deficit of 4.76 million tonnes in the 2019-20 season, driven partly by lower production in India and Thailand.

The inter-governmental body, in its first full outlook for the 2019-20 (FY20) season, which begins on October 1, saw global production falling by 2.35 per cent to 171.98 million tonnes (mt), while consumption will rise by 1.34 per cent to 176.74 mt.

“The fundamentals provide some grounds for cautious optimism concerning future dynamics in world prices,” the ISO said. Production in India is seen falling to 28.3 mt in FY20, from the previous season's 33.0 mt, while in Thailand output will drop to 12.9 mt from 14.4 mt.

The ISO noted that consumption growth was expected to be below the 1.8 per cent average seen up to 2016-17. “A considerable part of losses in consumption growth rates can be attributed to a slowing in global population growth, but the data on per capita consumption also shows a descending trend,” it said. The ISO forecast a surplus of 1.72 mt for the 2018-19 season which finishes at the end of this month.

Apple to Samsung: 75 new smartphone models to kick off festive season sales

Amid a potential slowdown, the country’s smartphone makers are gearing up for bumper sales ahead of the festival season. To draw consumers, at least 75 new smartphone models have been lined up and that may add momentum to the already growing sector.

Initial estimates — based on trends of the past two months — suggest that during the July-September quarter smartphone shipments may touch an all-time high. While last year, during the corresponding quarter, nearly 42.6 million units were shipped in, this year the number may surpass 45 million, analysts estimate.

Prabhu Ram, head of industry intelligence group, CyberMedia Research, says smartphone shipments will grow 8-10 per cent year-on-year during the quarter. “Smartphone brands have lined up many exiting launches, backed by attractive offers. Online shopping festivals will further pique customers’ interest,” he said.

The euphoria is clearly visible in activities of the smartphone majors. Market leader Xiaomi is planning to launch Redmi Note 8 and 8 Pro, extension of its flagship Note series. Second-largest player Samsung has lined up launches under its current online-only series M that directly competes with Xiaomi. The Korean giant will also launch new models under its yearly flagship Galaxy S series in September.

Samsung’s rival in the super premium segment — Apple — is not behind. New iPhone models are expected to be unveiled in the country by October — days ahead of Diwali. OnePlus, another heavyweight in the premium category that frequently beats Apple and Samsung in their own turf, is launching OnePlus 7T — replacing the bestselling OnePlus 6T this month.

Vivo, Oppo, and Realme, the third-, fourth- and fifth-largest players currently, have their own flagships lined up. Vivo Z2 Pro, Z1X Pro, and Z5, Realme XT, and Oppo Reno 2 series are in the pipeline. Other leading brands like Nokia, Huawei, and Honor are coming out with Nokia 6.2, 7.2, and 8.2, Huawei Mate 30 series, and Honor 9X series, respectively, during the festival season.

Lenovo is relaunching its mother brand after it withdrew Lenovo smartphones from the market over a year ago. The Chinese major is planning to lap up its dual-brand strategy this season — with Lenovo and Motorola — targeting different sets of consumers.

While a flurry of launches usually hit the market every year during the September-October period, analysts say the enthusiasm this year is in stark contrast in comparison with the conditions in the overall consumer goods market that is going through a slowdown in sales.

The uniqueness of the country’s smartphone market is probably acting as a saving grace. Unlike other consumer goods categories like packaged food and beverages, cars, and personal care items, smartphone buyers consider e-commerce channel to be a key shopping outlet. The share of online channel ranges between 35 per cent and 40 per cent of all smartphone sales compared to less than 2 per cent for fast-moving consumer good items, and nil for automobiles.

In the coming weeks, online retailers are expected to further raise the pitch with shopping festivals, discounts, and cashback offers. Last year, these measures led to record sales of handsets during the season.

Navkendar Singh, research director at IDC, said, “We should expect continued aggression by online heavy brands and e-tailers in the next few months fuelled by new launches and price reductions of last few launches, leading up to the festive season.”

Moreover, rapid expansion of footprint in the offline retail space by leading players like Xiaomi, Vivo, and Oppo in the past few years may lead to fierce competition for shelf space. Singh said this will make the retail channel very critical for any brand’s success in the weeks ahead.

Samsung, which has recently bounced back with a strong proposition in the online space, is eyeing double-digit growth in sales in premium category, said Ranjivjit Singh, chief marketing officer, Samsung. Raghu Reddy, head of categories and online sales for Xiaomi, said he expects the market to grow by 8-9 per cent during the festival season.

Jet fails to find new suitor, further deadline extension for EoI unlikely

The decision of Jet Airways’ lenders to extend the deadline for submission of expression of interest (EoI) did not pay any dividend as the grounded airline failed to attract any new bidder till August 31, said a source familiar with the development.

The lenders had extended the date of submission of EoI till August 31 with the hope of getting more EoIs for the airline. Now, Jet’s resolution professional (RP), Ashish Chhawchharia, will evaluate the three EoIs he has received so far and furnish the list of eligible investors.

It is highly unlikely that the lenders and the RP will extend the deadline again, sources said.

Panama-based Avantulo Group and Russian Fund Treasury RA Creator were the first ones to submit EoI for Jet followed by an exploratory EoI by billionaire Anil Agarwal family trust Volcan Investment. However, Volcan opted out of the race. South America-based Synergy Group Corp was the third one to submit an EoI.

The airline’s RP is in talks with the new suitor, which has shown genuine interest in the defunct airline, said people in the know. The Synergy Group is eyeing a 49 per cent in the defunct airline and will also discuss co-investment options with the lenders and other infrastructure companies, the group’s advisor had said. “We intend to structure the acquisition as a foreign company with 49 per cent stake. Jet is publicly listed and we hope lenders would be willing to convert their debt into equity. We will also discuss partnerships with Indian infrastructure companies. We have several options,” said Antonio Guizzetti, president of consultancy G&A, which is advising the Synergy Group regarding the stake buy.

He said the amount of investment by the Synergy Group will depend on discussions and negotiations with banks and other creditors.

The RP has so far received claims of Rs 30,558 crore from financial creditors, operational creditors, and employees. In the revised claims data put out by the RP, of the total claims of Rs 30,558 crore, RP has accepted claims of Rs 12,555 crore and rejected claims worth Rs 11,995 crore with Rs 6,055 crore worth of claims still under verification. So far, Jet has received 18,596 claims, of which 13,911 have been admitted.

The airline came under insolvency on June 20 as lenders after months of negotiation failed to find any suitor. It had stopped flying on April 17.