| News Announcement |
Impact Analysis |
| Modi government takes charge on 30th May with new cabinet sworn in |
- The surprise exclusions from the cabinet included Jayant Sinha and Rajyavardhan Rathore
- While Amit Shah was expected to get cabinet rank, the induction of S Jayshankar was a pleasant surprise
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| Key portfolios get shuffled around in Modi 2.0 regime |
- Nirmala takes over all important Ministries of Finance and Corporate Affairs and Amit Shah gets Home
- Rajnath Singh moves to Defence while ex-bureaucrat S Jayshankar moves in as Minister of External Affairs
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| GDP disappointed in the fourth quarter at just 5.8% annualized |
- The Q4 GDP was lower than expected and even the full year GDP was lower than expected at just 6.8%
- The pressure continued on the agriculture and manufacturing front with added pressure from tight liquidity conditions
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| Brent prices cracked sharply below the $65/bbl mark during the week |
- This sharp fall in crude happened despite the Iran sanctions and the OPEC supply cuts which offered price support
- The big concern in global markets was the trade war and risk of a slowdown in GDP as hinted by negative yield curve
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| L&T to launch open offer to Mindtree shareholders on June 17th |
- L&T has already acquired close to 29% stake in Mindtree and is now statutorily bound to make open offer to shareholders
- The success of the takeover will hinge on the FPIs who hold more than 40% stake in Mindtree
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| Modi government meets revised fiscal target for fiscal 2018-19 |
- The 3.4% revised fiscal deficit target was met by last minute cuts in spending on areas like healthcare and education
- For the fiscal year 2019-20, the government has already touched 22% of full year fiscal deficit target in April itself
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| Modi government extends pension scheme to shopkeepers and traders |
- The budget had originally envisaged the scheme only for farmers in the rural and semi-urban areas
- Now this facility has also been extended to 3 crore traders and retailers, who have been a loyal voter base of the NDA
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| Government to present the full year budget on July 05th |
- The full year budget superseding the interim budget will be presented on July 05th as part of the 1 month budget session
- The markets are expecting this to be a kind of a big bang budget considering the growth and job challenges
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| Unemployment touches a 45-year high of 6.1% in the latest year |
- In what would typically call for urgent attention, the jobless number of NSSO almost match the estimates of CMIE
- This would entail a big focus on making agriculture productive and also to give a big boost to the SME segment
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| Manpasand Beverages loses 55% value in just five days |
- The problems for the group had started last year but got exacerbated with the arrest of their CEO for GST default
- Corporate governance has been a major issue at Manpasand and last year their auditors had resigned for the same reason
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| Bond yields in the Indian market fell to a multi-year low of 7.03% |
- The sharp fall in bond yields was led by cues from the US bond markets where benchmark yields have crashed to 2.2%
- The fall in yields has been triggered by rate cut hopes, surge in liquidity in markets and fears of global slowdown
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| Analysts expect the RBI to cut repo rates by 25 bps in its June meet |
- This cut, if it comes, would be on top of a 50 bps cut overall in the months of February and April
- With inflation in check and growth faltering, the cut in interest rates can go a long way to resuscitate growth
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| India continues to get diverse weather reports from the agencies |
- Private sector, SKYMET, expects June to be one of the driest months impacting the sowing and cropping season
- But, government owned IMD expects average rainfall but sees limited impact on agricultural output for the year
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| India likely to turn net importer of steel in fiscal 2020 |
- India has been consistently a net exporter in the last 3 years and that could change with the influx of cheap steel
- Japan and Korea have dominated steel exports to India cornering nearly 60% of the total market
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| Bharti sees its ARPUs finally picking up by 19% in the fourth quarter |
- The sharp pick-up in ARPUs was largely driven by the strategy to gradually weed out the low revenue customers
- However, analysts are of the view that at current levels, Bharti may still struggle to remain profitable in the telecom segment
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| ICRA calls for stringent risk management systems for NBFCs |
- The big focus will be on reducing the maturity mismatch for NBFCs to the extent possible
- NBFCs will also be asked to maintain liquid assets as a buffer and will now also appoint a Chief Risk Officer
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| Samsung plans big investments to make India a manufacturing base |
- Samsung plans to double its smart phones sales in India and take it up to a value of $1 billion per annum
- In India, Samsung phones operate in the mid-range of Rs.8,000 to Rs.18,000 price band, which is the preferred band
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| Trump plans to fully ban work permits for the spouses of IT employees |
- By banning work permits for spouses, the intent is to save more jobs in the US for the local population
- This work permit under H4 was launched by Obama to leverage on the skills of a qualified spouse
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| High margin ethanol bails out the sugar industry in the fourth quarter |
- While ethanol contributes only 12% of revenues it accounts for nearly 50% of the profits of sugar companies
- The core sugar business has been under pressure following another year of excess supply pushing prices down
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| OMC combined debt rises to a five year high of Rs.1,62,000 crore |
- This debt pile is due to higher capital spending and also due to delays in payment of subsidies to OMCs
- The last time this happened was when crude had crossed $100/bbl, even as oil is just at $65/bbl currently
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| SEBI insists on quick disclosure of all bond defaults by corporates |
- SEBI is of the view that quicker disclosure will enable the investors to take more informed decisions
- However, bank loans continue to be out of the purview of disclosure due to historical reasons
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