| News Announcement |
Impact Analysis |
| RBI monetary policy maintains status quo on repo rates |
- Along expected lines the repo rate was held at 6% as was the SLR and the CRR at 19.5% and 4% respectively
- The MPC also maintained a neutral stance on monetary policy although higher inflation could impel rate hikes in future
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| ICICI Securities listed at a steep discount of over 16% on Wednesday |
- The sentiment around the stock was already soured due to the company getting only 78% subscription for its IPO
- In addition, the charges of favouritism against the ICICI Bank CEO had also dampened sentiments around the stock
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| Trade war between the US and China appeared to worsen during the week |
- China retaliated to US tariff proposals by imposing 25% tariff on 106 items of import from the US
- The worry is that this could gradually escalate into a full-fledged trade war impacting other nations too
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| RCOM gets some relief as court permits sale of its assets to Jio |
- The $4 billion RCOM-Jio asset sale deal had been held up due to a stay order obtained by Ericsson over unpaid claims
- While the deal will be permitted, the funds will be held in an escrow account till the minority shareholder case is decided
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| Macquarie bets big time on Indian consumer staple stocks |
- Most consumer staples have benefited from a more friendly GST regime for food products
- In addition, the government thrust on rural demand is also opening up the demand gates for FMCG products
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| Nikko of Japan feels that trade war fears were overestimated |
- According to Nikko, if the trade tariffs are going to impact only $50 billion of trade, then it could actually be immaterial
- The tariffs are likely to hit just about 10% of total US-China trade and so the collateral damage will be limited
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| Indigo confirmed that it is opting out of the race for Air India |
- Indigo had apparently blamed the unfavourable terms of the deal offered by the government for opting out
- While the 76% sale is attractive, the uncertainty is over the Rs.34,000 crore debt burden and land monetization
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| RBI pays out an additional Rs.10,000 crore dividend to government |
- RBI had transferred Rs.13,000 crore to the contingency reserve and reduced the dividend to the government
- To bridge its revenue shortfall, the government had asked the RBI to payout a higher dividend this year
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| RBI bans regulated entities from dealing in crypto currencies |
- Since RBI regulated entities are an all-encompassing term, this could virtually put an end to crypto currencies like Bitcoins
- RBI, like other central banks, has been worried about the security and the monetary implications of Bitcoins
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| Banks push for winding up of Alok Industries and Jyoti Structures |
- There was only one bid for both the companies and the deadline is almost over for both the companies under NCLT
- Under the IBC, if the case is not resolved 270 days then the company has to be compulsorily liquidated
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| India pips Japan to become the world’s second largest steel producer |
- Indian output is approaching 100 million tonnes and is slated to grow to 300 million tonnes by the year 2030
- India had overtaken the US in 2015. China, however, remains the largest with 50% of the world steel output
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| ICICI Bank shareholders lost over Rs.30,000 crore in market cap |
- The stock has corrected sharply since the CEO’s conflict of interest case broke out
- In addition, retail investors hold Rs.35,000 crore exposure in ICICI Bank indirectly through mutual funds
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| RBI tacitly admits that US Fed could be a key trigger for domestic rates |
- RBI cannot afford to cut rates when the Fed is hiking as it would narrow the yield differential and FPIs could sell
- That trend was visible in 2013 when nearly $13 billion of bonds were sold by FPIs in less than a fortnight
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| OPEC output continues to be under pressure due to Venezuela factor |
- The crisis in Venezuela and Libya have been added to the planned production cuts by OPEC and Russia
- Brent Crude has stayed above the $70/bbl mark and is expected to remain buoyant through the year
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| JSW Steel buys 26% stake in Numetal to bid for Essar Steel |
- Numetal had been disqualified from bidding for Essar Steel as Rewant Ruia was on their board
- Both Numetal and Arcelor Mittal are key bidders for Essar Steel as global players look at India steel capacity
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| Mr. Vaghul bats for a more deeper inquiry into the ICICI allegations |
- The former ICICI Bank boss, while expressing confidence in the management, has called for a deeper probe
- To quote Vaghul, Corporate governance is always a matter of perception and that can only be managed with transparency
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| Deutsche Bank warns that the Dollar short trade may be coming to an end |
- In the last year emerging market bonds yielded over 13% of which more than half came from dollar weakness
- Deutsche has warned that over $750 billion riding on this trade may not be at risk as the dollar could strengthen
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| Core sector growth came in at 5.3% for the month of February 2018 |
- The thrust to core sector was driven by cement, refinery products and fertilizers as steel was subdued
- Core sector accounts for over 40% of the IIP and has key implications for the PMI-Manufacturing and for GDP
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| GlaxoSmithKline plans to sell off its Indian healthcare business |
- The money from the sale will be used to finance the buyout of Novartis’ 36.5% stake in the healthcare joint venture
- The consumer healthcare products of Glaxo like Boost and Horlicks were stagnating in a competitive Indian market
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| FPI flows into equities in 2017-18 almost halved to just $4 billion |
- In the last one year, Indian equities have grossly underperformed other Asian markets
- Concerns over valuations and the corporate governance issues like the PNB fiasco also took its toll on FPI flows
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| Indian companies raised Rs.84,300 crore via IPOs in fiscal 2017-18 |
- This figure is nearly 3 times the figure achieved in 2016-17 and was largely led by PSU driven IPOs
- With the government’s aggressive divestment targets, the current year could also see a spate of IPOs
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