| Major News Item | Impact Analysis |
| Ø GDP growth for Sep-17 quarter comes in higher at 6.3% and GVA at 6.1% | Ø This marks a sharp improvement in GDP compared to just 5.7% growth recorded in the June quarter
Ø The full impact of GST has not been recorded in the GDP and any negative vibes may be visible in the Dec-17 quarter
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| Ø Government reaches 96% of fiscal deficit limit in first 7 months | Ø With tepid GST revenues and large commitments on the expenditure front, government looks to overshoot target
Ø This may be a little odd for the Indian economy considering that Moody’s had recently upgraded India’s rating
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| Ø Core sector growth for October came in at 4.7% compared to 7.1% last Oct | Ø The sharp decline in core sector was driven by sectors like steel, cement and refinery products due to GST impact
Ø Core sector accounts for nearly 40% of the overall IIP and hence is a critical component of GDP growth
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| Ø S&P refrained from raising India’s sovereign ratings, unlike Moody’s | Ø The refusal by S&P to upgrade the ratings of India was due to fiscal concerns and inflation fears
Ø S&P has also expressed worries over the low GDP per capita in India, although S&P is bullish on Indian economy overall
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| Ø ONGC demands higher gas prices for Kutch and KG basin finds | Ø Despite better pricing for gas, both RIL and ONGC are still finding the current pricing structure Non-remunerative
Ø Higher gas supply will be a big boon for gas-fired power plants and the costs can come down drastically
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| Ø NPA provisioning for 2018 likely to be higher by 30%, as per ICRA | Ø RBI has already identified total loans worth Rs.300,000 crore for resolution through the IBC mechanism
Ø That would mean nearly Rs.260,000 crore for provision to be made in the current year as is statutorily required
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| Ø China Development Bank initiates liquidation proceedings against RCOM | Ø RCOM has debt to the tune of Rs.45,000 crore of which nearly 50% is accounted for by borrowings from CDB
Ø Foreign lenders are getting jittery after RCOM’s plans to merge with Aircel and sell its tower assets fell through
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| Ø GST collections for October were sharply lower by 10% | Ø The sharp fall in the GST collections can be attributed to the reduction in peak rates of GST in 75% of the peak rate items
Ø According to the government, this fall can also be attributed to larger refund claims during the month of October
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| Ø Exporters badly hit by delay in payment of export credit on GST | Ø A total of $7.7 billion worth of export-related GST refunds are stuck up in processing
Ø This has forced exporters to lay off workers as their working capital situation has become quite alarming
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| Ø Telecom Regulatory Authority of India (TRAI) bats for net neutrality | Ø The TRAI, in its order, has expressly prohibited any discrimination of subscribers based on content
Ø However, lower pricing for fixed period will not fall in this ambit, which will be good news for Reliance Jio |
| Ø Venture funds may stay out of stressed assets for now, as per Ramnath | Ø Renuka Ramnath is of the view that the current regulatory ambiguity does not encourage VC/PE participation
Ø Indian banks are dealing with billions of dollars of stressed assets with the help of ARCs and P/Es could be key players
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| Ø Oil minister in favour of bringing gas under the ambit of GST | Ø According to Pradhan, bringing natural gas under GST will help improve contribution of gas in the hydrocarbon mix
Ø Indian government wants to increase the share of gas from 6.5% to 15% and GST could make a big difference
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| Ø Government looks to restructure AI debt in sync with assets | Ø Out of the total debt of $7.6 billion, nearly $4.7 billion may be taken out and paired with real estate assets
Ø That will reduce the debt of the core airline operation and make it more attractive for buyers
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| Ø North Korea worsens geopolitical situation in Asia | Ø North Korea has tested an ICBM during the week, with the capability to hit as far as the US mainland
Ø While the US has remained silent, Trump has already warned North Korea of dire consequences if they persist
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| Ø OPEC and Russia decided to continue oil supply cuts till end of 2018 | Ø Significantly, the quantum of cuts has been kept static at the level of 1.8 million barrels per day (bpd)
Ø For the first time, OPEC and Russia have hinted at winding up the supply cuts earlier if the demand picks up
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| Ø Dow Jones scales all-time high above the 24,000 mark | Ø The surge in the Dow has been largely triggered by hopes that the tax bill could be a major game-changer for the US
Ø US growth continues to be erratic but markets are betting on a major infrastructure boost, apart from tax sops
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| Ø IFCI also initiates insolvency proceedings against Reliance Naval | Ø This pertains to a Rs.60 crore loan given by IFCI to a subsidiary of Reliance Naval, which has turned bad
Ø However, IFCI is an unsecured lender and has been requested by other lenders to opt for out-of-court settlement
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| Ø Bitcoin briefly crosses the $10,000 mark during the week | Ø Bitcoin, a crypto currency has been one of the best performing asset classes in the last 1 year appreciating over 15 times
Ø Analysts and policy watchers are already worried about a bubble building up in Bitcoin on the lines of the Tulip mania
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| Ø All eyes will be on the outcome of Gujarat elections in December | Ø The outcome of the Gujarat elections will be seen as a mini-referendum on the central elections in 2019
Ø The UP civic elections were again encouraging for the BJP and markets will prefer a status quo in Gujarat
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| Ø Auto companies report smart growth numbers for November | Ø However, this number needs to be taken with a pinch of salt as November last year had suffered due to the note ban
Ø The positive performance has been pronounced across the four-wheeler and the two-wheeler segment
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| Ø DLF promoters to infuse nearly Rs.11,250 crore into the company | Ø The infusion of funds will happen through a QIP and will help to substantially reduce the debt of the DLF group
Ø Recently GIC of Singapore had taken a stake in the commercial subsidiary of DLF as well as in the company itself |
