RBI board reviews state of economy
Microsoft to permanently close most of its physical stores
Microsoft said Friday it is permanently closing nearly all of its physical stores around the world.
Like other retailers, the software and computing giant, co-founded by now-philanthropist Bill gates, had to temporarily close stores in late March due to the COVID-19 pandemic.
According to its Web site, Microsoft has 83 stores worldwide, including 72 stores in the US, and several others abroad where it showcases and sells laptops and other hardware.
Friday’s announcement reflects what the company calls a “strategic change” for its retail business as sales increasingly shift online.
Microsoft said it would “reimagine” the physical spaces at its four high-profile Microsoft Experience Centers in New York, London, Sydney, Australia and at the company’s headquarters in Redmond, Wash.
All employees will have the opportunity to remain with the company, Microsoft said.
Microsoft said the closures would result in a pretax charge of about $450 million, or 5 cents per share, taken in the current quarter ending June 30.
Shares of Microsoft were down 1.9 percent during early afternoon trading, at $196.61.
The announcement about the shuttering stores comes at a time when estimates of how many US retailers overall will go out of business in 2020 run as as high as 25,000 because of business woes caused by the coronavirus pandemic..
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Asset quality of housing lenders likely to worsen: ICRA
Gross NPAs may rise 2.5-3% in FY21 from 1.7% last fiscal
Indian housing finance companies (HFCs) are likely to face worsening of asset quality this year, with about 30% of their portfolios falling within the regulator-approved moratorium as of end-May, rating agency ICRA said on Friday.
ICRA said gross non-performing assets (GNPA) in the housing segment could increase 2.5-3% in the fiscal year through March 2021 from an estimated 1.7%, as of March this year. In the non-housing segment, the GNPA could be higher at 3-4.5% by the end of fiscal year 2021 from 2.5% at the end of this fiscal year, the rating agency said. “While home loans are expected to show higher resilience on the asset quality front vis-a-vis other asset classes owing to their secured nature and majority also being self-occupied, the loss of income for borrowers could lead to an increase in the GNPA in the housing loan segment as well,” Supreeta Nijjar, vice-president, financial sector ratings at ICRA, said.
The rating agency, however, noted that lifetime losses may remain under control for the HFCs.
“The lifetime credit losses for the HFCs could be an interplay of factors such as the duration for revival of the borrowers’ income levels, borrowers’ emotional attachment to the property, and whether the properties are self-occupied or under construction,” she said.
“Overall, the lifetime losses might still be the lowest in this asset class,” she added.
Manhattan Office Rents Seen Plunging 26% in Prolonged Downturn
Manhattan’s office rents are likely to plummet to the lowest level since 2012 if the U.S. economy doesn’t recover quickly from the pandemic.
Asking rents could decline 26% to about $62.47 a square foot (roughly $672 per square meter) in a prolonged recession, according to a report from Savills. Rents haven’t fallen to that level since 2012, the real estate services firm said.
Some offices in New York City have reopened, though many buildings remain empty. The city faces a long recovery with workers wary of public transportation and dense workplaces.
“Many assume that when the stay-at-home measures are lifted, there will still be Covid-19 fears that will continue to materially influence behaviors and the economy,” Savills said. “These fears will likely remain until a vaccine or antibody therapy is developed and widely available, which experts currently estimate is at least 12 months away.”
Savills’ research used indicators that it says are correlated to rental rates, including gross domestic product, unemployment and office vacancies in Manhattan.
‘Mobile, electronics firms facing targeted attacks’
Industry flags anti-China sentiment
The India Cellular and Electronics Association (ICEA) on Friday said its member companies “of a country of a certain origin” are facing targeted vandalism of signboards, unlawful demonstrations at factories and retail stores, and threats to employees by “fringe elements” armed with iron rods and sticks.
In an advisory, the industry association asked its members not to overlook such incidents and to immediately report such incidents to the local police and senior officials for appropriate legal action and prosecution.
The advisory follows a recent protest outside the factory of Chinese smartphone maker Oppo by a fringe group, whose members forcibly put locks on the factory’s gates and did not allow any movement.
Amid continuing border tensions between India and China, there has been an increase in anti-Chinese goods sentiment in the country.
RBI board reviews state of economy
“The board deliberated on the current economic situation and the evolving challenges posed by the pandemic,” the RBI said in a statement.
The board of the Reserve Bank of India (RBI), which met for the first time on Friday since the nationwide lockdown, discussed the current economic situation and the challenges posed by COVID-19. The meeting was held via video-conference.
“The board deliberated on the current economic situation and the evolving challenges posed by the pandemic,” the RBI said in a statement. “Among others, the board also discussed the Reserve Bank’s activities during the period [July 2019-June 2020], the budget for the next accounting year July 2020 to March 2021 [aligned with the government’s financial year], other policy and operational matters,” the RBI said.