| News Announcement |
Impact Analysis |
| Brent Crude closes the week near the psychological $60/bbl mark |
- During the week, the oil prices surged beyond $63/bbl after Saudi Arabia appointed an oil hawk as new Energy Minister
- However, Trump stating that the US would ease sanctions on Iran was instrumental in pulling oil down again
|
| CPI inflation for August comes in mildly higher at 3.21% |
- This was nearly 6 bps higher than July and was largely represented by a rise in food inflation during the month
- With inflation still within the RBI comfort zone of 4%, the rate cut in October appears to be on the cards
|
| IIP for July comes in lower at 4.3% on a YOY basis |
- The sharp fall in the IIP was largely driven by manufacturing basket of IIP falling from 7% to 4.2% on a YOY basis
- Combined with reasonable inflation, the sharp fall in manufacturing IIP makes a strong case for a rate cut
|
| Altico defaults on ECB debt to Mashreq Bank of the Middle East |
- This default led to a downgrade of the bonds of Altico (a real estate lending NBFC) to junk status
- UTI Fund and RNAM Fund, with a significant exposure to Altico, have already side-pocketed their Altico holdings
|
| Kris Gopalakrishnan to head government panel on data |
- India’s data policy and privacy policies have been the subject of much debate in the last few years
- This committee will submit a report that will form the basis of a wider consultation on non-personal data
|
| Trade tensions eased during the week after US and China decide to talk |
- In response to China exempting select American products from tariffs, US also postponed tariffs on China
- The two nations are scheduled to meet in October and the US has agreed to keep Huawei out of the discussions
|
| ECB announced the resumption of QE and cut rates further into negative |
- ECB chair Draghi announced 10 bps cut in rates to (-0.50%) and announced €20 billion QE per month from November
- This decision may impel the US Fed to also persist with rate cuts even as Trump has been calling for negative rates
|
| Merchandise trade deficit for August almost flat at $13.45 billion |
- The fall in trade deficit was triggered by a 6% fall in exports and a 13% fall in overall imports
- The data appears to be more indicative of an overall slowdown in global trade due to the ongoing trade war
|
| After Maruti and Ashok Leyland, M&M also announces production stoppage |
- The rise in no production days at auto plants is being driven an unprecedented slowdown in auto demand
- The problems has gotten compounded because banks are now getting wary of funding dealer auto inventories
|
| GST Council to meet on Friday, September 20th to debate GST cuts |
- It is proposed to cut GST rates on a number of products including automobiles and biscuits to arrest slowdown
- However, states have objected to the GST rate cut on autos as it would lead to loss of revenues of Rs.50,000 crore
|
| Government likely to sell stake in BPCL to global oil firm |
- In a first major effort at privatization of oil companies, the government may hive off its stake in BPCL
- This was viewed positively by the market with BPCL being the top gainer on the last trading day of the week
|
| Government may sell up to 100% stake in Air India to sweeten the deal |
- With buyers uninterested in a minority stake in Air India, the government is now open to selling 100% in the flag carrier
- However, the government will had to address its $8 billion debt and monetization of hidden assets first
|
| Gold stays above $1500/oz in the international spot market |
- Despite the thawing of uncertainty between the US and China, the gold prices remained elevated
- The gold silver ratio is at the upper end of the historical spectrum and that will cap any rise in gold prices
|
| London Stock Exchange rejects $39 billion bid by HKSE |
- Hong Kong Stock Exchange had made an aggressive bid for the LSE at $39 billion to expand its global presence
- However, LSE had recently acquired Refinitiv for $26 billion and this amounted to undervaluing the SOTP
|
| Scottish court rejects Boris Johnson’s proposal to suspend parliament |
- Labour party scored a small victory after the parliament suspension plan was struck down
- That means the BREXIT date gets postponed to 2020 and there is more time to craft a BREXIT deal for the UK
|
| Bharti Airtel plans INVIT for optic fibre assets to raise $2 billion |
- INVIT is a vehicle to separate the key infrastructure assets owned by a service provider into a separate SPV
- This allows the main service company to become less asset intensive and in the process improves ROE
|
| BOFA ML sees possibility of 50 bps rate cut in October policy |
- According to BOFA, the weak GDP numbers in June quarter and the low IIP paves the way for a 50 bps rate cut
- However, the RBI may be wary of losing out on its leverage if it front ends too much of its rate cuts in a short span of time
|
| Liquid funds see higher inflows, credit risk funds see outflows |
- The overall AUM of the mutual funds segment hardly shifted in the month of August and stayed around Rs.25.4 trillion
- Even monthly SIPs at Rs.8230 crore were slightly lower than the previous month but remain robust overall
|
| Modi government completes 100 days in office during the week |
- On the political front, the abrogation of Section 370 and the Chandrayaan-II remained the big positives in 100 days
- However, GDP growth in June quarter came in at a 6 year low of 5% and the slowdown is pinching the economy hard
|
| Private equity flows in August higher by 13% at $4.4 billion |
- Most of the PE deals happened essentially in the realty and infrastructure sector during the month
- There were a total 16 big ticket deals with a ticket size of more than $100 million during the month
|
| Indian telecom companies may now have to shell out Rs.41,000 crore |
- This payment is towards additional spectrum usage charges and falls hardest on Bharti Airtel and Vodafone Idea
- This would mean additional pressure on telecom companies that are already under ARPU pressure currently
|
