| News Announcement |
Impact Analysis |
| Fed chief hints at a clear likelihood of a rate hike in September |
- The Fed testimony by Powell was quite clear that raising rates would be a necessary antidote to rising growth
- Emerging markets like India are worried about rising US rates as it indicates the possibility of risk-off trades by FIIs
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| India’s forex reserves slip below the psychological $400 billion mark |
- In the last few months, the RBI has seen nearly $25 billion worth of forex depleted defending the INR
- With the forex chest now covering less than 9 months of imports, the only option for RBI may be another rate hike
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| Ministry of Defence clears purchases of arms worth Rs.46,000 crore |
- This massive allocation will include the purchase of missiles, naval helicopters and much needed guns and ammunition
- This also means a big fillip to the domestic defence industry which is likely to benefit from larger order flows
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| Indian aluminium makers record 12% growth in April-July period |
- Both NALCO and Vedanta exceeded their production targets for the period, while Hindalco was almost at par
- The situation is quite ironic because across the world aluminium producers are struggling to keep pace
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| 60 companies with stressed loan book of Rs.3.5 trillion in trouble |
- The time limit for resolution expires on 27th August post which they will be automatically referred to the NCLT
- These are the cases where the NPA issues are yet to be resolved and could put a major pressure on banks
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| Central government to offer Rs.5500 crore of subsidies for Electric Vehicles |
- The government has widened its gamut of EVs to include cars, taxis, scooters, green buses and other two wheelers
- The government is keen to reduce the dependence on fossil fuels as India relies on imports for 75% of daily needs
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| L&T announced its maiden buyback of shares in August |
- L&T will buy back 6 crore shares at a maximum price of Rs.1500 per share amounting to Rs.9000 crore
- While L&T does not have too many capex plans, this could also be a move to ward of potential acquirers
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| Tata Sons increases its stake in Tata Motors during the price fall |
- In the last few years, Tata Sons has increased its stake in Tata Motors from 25.22% to 33.40% consolidating its control
- Tata Sons is flush with cash due to the massive buyback undertaken by TCS, which is financing these stake hikes
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| NCLAT strikes down Mistry’s request to ban taking Tata Sons private |
- While this allows Tata Sons to turn private, NCLAT has also stressed that Mistry family cannot be forced to sell its stake
- The real challenge will be that once the company goes private, Mistry cannot sell the stake without the assent of the Tatas
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| RCOM completed the sale of assets worth Rs.2000 crore to Reliance Jio |
- This is part of the overall plan that RCOM has to monetize its assets to repay its Rs.25,000 crore of loans
- This deal had been held up due to Ericsson seeking a stay on the sale. The Ericsson case has since been settled amicably
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| Defensive stocks drove the Nifty higher during the week |
- The big boost came from pharma stocks and FMCG stocks, which are likely to gain the most from higher inflation
- Metals and oil remained under pressure despite good results as they are likely to be hit by any kind of trade war
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| Finance Ministry asks Bank CEOs to take responsibility for large frauds |
- This warning comes after Neeraj Singal of Bhushan was arrested on grounds of siphoning money out
- Bank CEOs will have to monitor loans above Rs.50 crore personally to ensure that there are no promoter frauds
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| PIMCO warns of a likely recession in the US based on yield spreads |
- The spread between the US 10-year yield and the 2-year yield compressed from 150 bps to just 23 bps
- An inverted yield curve or narrowing spreads are indicative of lack of confidence in the future hinting at likely recession
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| GST launch may have given a big boost to warehouse demand |
- The sharp increase in the demand for warehouses post GST was pointed out by real estate consultant CBRE
- GST has impelled companies to look at logistics more as an operating efficiency rather than managing taxes
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| Jet Airways plans to announce results and a cost cutting plan on 27th August |
- Jet was originally supposed to announce results on August 09th which was put off leading to a sharp correction in price
- Jet plans to cut costs sharply, including manpower costs, and give a game plan in the AGM with results announcement
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| Private insurers may have finally started cannibalizing LIC share |
- July marked the 7th straight month of market share decline for LIC with its life insurance share at 69.5% currently
- Private insurers are now focusing more on the high margin businesses and less on volumes
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| Venezuela devalued its currency, the Bolivar, by 95% |
- The Bolivar effectively depreciated from 285,000/dollar to a new low of 6 million/dollar in a single move
- Venezuela is in the midst of social and economic crisis and this is a last ditch effort by the government to bail out
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| Exit of Ranganath underlines Infy’s manpower challenges |
- Infosys has a big manpower challenge with an attrition rate in excess of 22%, the highest in the industry
- The change of 4 CFOs in the last 5 years has not sent the right signals on the transparency of financial reporting
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| Government targets raising Rs.12,000 crore via buybacks |
- With the IPO market already overcrowded, the government will need more reliable ways of meeting revenue targets
- This proposal will be restricted to the oil PSUs and other cash rich PSUs, that can afford to do a buyback
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| Rupee crossed the 70/$ mark and has lost over 9.84% since Jan-2018 |
- India has been the worst performing Asian currency in 2018 with only the Philippines coming close with -6.6% fall
- For India it is not just the dollar strength but also domestic concerns over trade deficit and rising inflation
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| Iran objects to other OPEC members taking its share of crude |
- There is a new battle within the OPEC to take over Iran’s share post the US sanctions being effective in November
- The OPEC may end up being an open turf war between the Iran and Saudi Arabia for regional hegemony
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