| News Announcement |
Impact Analysis |
| 10-year bond yield spike sharply on the back of farm loan waivers |
- Bond yields jumped by nearly 10 bps on Friday after the government hinted at Rs.3 trillion farm loan waiver package
- This is likely to be a direct credit to farmers who sold below the MSP post the implementation in June
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| Modi hints at Rs.300,000 crore relief package for farmers |
- This huge package will include loan waivers and direct credit for the shortfall below the MSP at which crops were sold
- There are a total of 263 million farmers who are likely to benefit from this move along with their families
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| Cabinet has approved the plan to list a total of 6 state owned companies |
- The list includes Kudremukh Iron, Telecom Consultants, RailTel Corp, National Seed Corp, Tehri Hydro among others
- While the timing was not clear, it can be seen as a monetizing of value of government owned assets to meet shortfall
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| Banks could end up with $3 billion loss on PNB fraud case |
- This is the overall loss that other banks may have to take on loans and guarantees to diamond businesses over time
- Apart from Modi and Choksi, who are absconding, similar frauds have been perpetrated by other promoters too
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| PVR seeks shareholder nod to raise a sum of Rs.750 crore |
- The funds are expected to be raised through placement of shares to qualified institutional buyers (QIBs)
- The funds will be used for funding acquisitions and also for short-term and long-term working capital needs
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| Government doubles export incentives for onion farmers to 10% |
- This steep rise in export incentive from 5% to 10% is intended to compensate the farmers for the steep drop in price
- The export incentive is in the form of credit which can be used by the farmers to pay various taxes
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| LIC witnessed a sharp fall in NPAs between March and October |
- NPAs of LIC fell from Rs.7040 crore to Rs.1580 crore, largely reversing the trend of the last three years
- The company still enjoys a comfortable solvency ratio of above 1.55% which shows its ability to discharge debt
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| The big questions for 2019 will be on the Fed move and trade wars |
- The Fed hiked rates by 100 bps in 2018 and the stance in 2019 will depend on the equations between Fed and Trump
- The trade war is currently suspended but relations with China worsened after the arrest of the Huawei CFO
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| Vadilal Industries has decided to delay the publication of audit report |
- This delay is largely attributed to differences within the board on the contents of the audit report
- In the recent past, such moves have seen severe punishment meted out to the stock by the markets
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| Japan 10-year bond yields fell below 0 for the first time since mid-2017 |
- The steep fall in the bond yields is indicative of larger worries on the Japanese growth front
- Japanese Nikkei index is still below half the levels of the peak seen in 1989, at the peak of the realty boom
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| EOW files second charge sheet against 63 entities in NSEL scam |
- For the first time some major brokers have also been named in the charge sheet, expanding the scope
- The Rs.5600 crore default by NSEL was triggered by illegal futures trade in the spot market
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| Fiscal deficit touches 115% of full year target by November 2018 |
- The maintenance of 3.3% target under FRBM will be a real challenge for the government in election year
- Higher fiscal deficit is negative for the Indian rupee and also for the external rating of the economy
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| Modified ecommerce rules heavily weighted in favour or domestics |
- The new rules put restrictions on global players like Amazon and Wal-Mart using the inventory model
- These global firms will not be allowed to offer special discounts or mandate exclusive rights for selling
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| Vedanta to invest $8 billion in capacity expansion in next 3 years |
- This will entail capacity expansion across oil extraction, aluminium capacity expansion and zinc capacity building
- Agarwal is heavily betting on the a revival of the commodity and industrial cycle in the coming years
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| Dow Jones continued to show weakness despite the brief rally |
- The NASDAQ has seen some of the FAANG stocks correct by nearly 30% from the peaks
- The Dow lost nearly 2000 points in the last couple of weeks after the US yield curve showed an inversion
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| Bimal Jalan to head 6-member panel to decide on reserve transfer |
- The government had been eyeing the massive $40 billion dollar capital reserve of the RBI to raise resources
- This was one of the reasons over which former governor, Dr. Patel had been forced to resign from his post
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| Congress promises entirely revamped GST structure for corporates |
- Congress has promised to make the GST more amenable and friendly towards MSME sector
- They have also proposed to cut down the total number of rate slabs to just one with a view to simplification
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| PIMCO turns bullish on Indian bonds on stable rupee and good yields |
- According to PIMCO, with low inflation, the real rates on Indian bonds are really attractive for investors
- PIMCO is the world’s largest bond fund manager and manages close to $2 trillion in AUM globally
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| Brent slips below $50/bbl before bouncing back from lower levels |
- The sharp fall in Brent came on the back of oversupply concerns and demand contraction on a slowdown
- Brent Crude has fallen from a high of $86/bbl to $50 in a span of just 2 months after the Iran sanctions were diluted
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| NCLT recoveries could cross Rs.1 lakh crore in the year 2019 |
- This will be on top of the Rs.80,000 crore that has been collected in the current year 2018
- This is likely to boost the bottom-lines of banks and also give them more ammunition to lend to industry
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| GST Council implemented another round of rate cuts in its last meeting |
- Many products were moved from the 28% bracket to 18% bracket leaving only luxury and sin goods in the 28% league
- The government has also hinted at merging the 12% and 18% slabs into a single rate to further simplify
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