It was a mixed day in the markets. The Indian markets closed in positive territory with the Nifty and the Sensex above their psychological levels. Reliance also became the first Indian company to scale the market cap of Rs.1 trillion. But the trade deal between the US and China could sour and that is not great news for the Indian markets. Trump decided to pass the resolution in the US House supporting the democratic uprising in Hong Kong and calling upon China to express restraint in dealing with Hong Kong protests. In the past, China had already warned the US to keep out of its internal affairs.
Karvy has challenged the SEBI order banning them from taking fresh clients by approaching the Securities Appellate Tribunal (SAT). The SAT is authorized to review any decisions taken by SEBI. The regulator had banned Karvy after it was found to have defaulted on payments of Rs.2000 crore to clients. But the real crux of the issue was that the company had transferred shares worth Rs.1096 crore from the accounts of its clients into its group accounts and had also used these shares as a pledge to raise money. SEBI had banned Karvy from taking new clients and also giving DP instructions.
The Indian rupee weakened sharply on Thursday by 27 paisa to Rs.71.62/$ on the back of growth concerns. With recent GDP estimates for the full year being pegged at below 5%, there was a rush from importers and banks to buy dollars even as many exporters were unwilling to convert their dollar earnings into Indian rupees. With the global situation volatile, the bet is that the dollar may strengthen as it automatically becomes the currency of first choice. That would be instrumental in weakening the rupee. Normally, foreign portfolio investors also turn risk-off in such situations.
In an interesting move, the government has indicated that they would like the RBI to buy out the stressed assets of the shadow banking sector. The shadow banking sector refers to the NBFCs like IL&FS and DHFL, which are in deep trouble due to revenue and maturity mismatches. The government’s worry is that the amount recoverable in these cases may be too small and banks may have to once again take huge write-offs in the form of bad debts. The government has been asking the RBI to take over these assets and then rescue the NBFCs so that banks become asset light in the meanwhile.
As part of its restructuring of its business portfolios, Reliance is looking to sell its news assets in the form of News 18 and TV18, which hit had acquired some years ago. The media industry has never been too lucrative in India and apparently RIL does not see too much of a fit for these kind of media assets with its core Jio platform. The Times Group is reportedly conducting its due diligence into the news assets of Reliance to arrive at a valuation before making a bid. Earlier, Reliance had also been talking to Sony TV for its television properties. The News 18 properties include news channels, entertainment and a very strong web presence. Reliance Jio has emerged as a formidable growth engine for the Reliance group and its overall profits in the next few years are expected to contribute substantially to RIL.
Uddhav Thackeray took oath as the Chief Minister of Maharashtra on 28th November after more than one month of uncertainty. Two cabinet ministers from each of the 3 parties also took oath on Thursday. While, the NCP will have a deputy CM nominee, the Congress will get the position of the speaker in the assembly. It is not clear who will get these positions just as the fate of Ajit Pawar is also not clear. The three parties have come together on the plank of a common minimum program with a huge focus on addressing the problems of the distressed farmers of Maharashtra on a priority basis.
