| News Announcement | Impact Analysis |
| Ø Reliance sells additional stake in Jio Platforms to global PE investors | Ø While 1.15% stake was sold to Silver Lakes, another 2.3% was sold to Vista Equity Partners
Ø Both the deals valued Jio Platforms at around $65 billion, a 12% premium to the valuations given by Facebook deal
|
| Ø RIL, Infosys and Hindustan Unilever accounted for 50% of Nifty bounce | Ø The sharp bounce in Nifty from the lows of March 23rd was driven by just 3 stocks with most banks still tepid
Ø RIL has recovered most of its losses after a series of deals gave hints that RIL could monetize and become zero debt by 2021
|
| Ø Franklin Templeton MF issues an apology to SEBI over its remarks | Ø This was after Templeton global CEO, Jennifer Johnson, had remonstrated about SEBI’s rules on unlisted holdings
Ø SEBI had pointed out that there was a grandfathering clause and an extended time limit for such a shift
|
| Ø April sees fall in equity fund flows and negative flows in credit risk funds | Ø Equity flows were still positive but nearly 47% lower on a MOM basis; largely supported by robust SIPs
Ø Credit risk funds saw outflows of Rs.19,300 crore, most of the outflows coming after the Franklin Templeton fiasco
|
| Ø Government raises the borrowing limit for the year to Rs.12 trillion | Ø This is a sharp spike from the original budgetary target of Rs.7.8 trillion. Rs. 6 trillion will now be the target for H1
Ø This is a clear indication that revenues are likely to be tepid in the fiscal and fiscal deficit could be sharply higher
|
| Ø Trump threatens end to trade deal but trade officials move ahead | Ø Trade representatives from the US and China are working overtime on ensuring that the deal does not break
Ø Earlier Trump had threatened China that he would call off the deal if China did not honour its $200 billion of US imports
|
| Ø Moody’s warns India of a rating downgrade soon | Ø Moody’s had recently lowered the outlook for Indian implying that any upgrades were entirely ruled out for now
Ø With the huge impact on growth, as evident from the PMI, and the spiralling fiscal deficit, downgrade looks a possibility
|
| Ø May issue of Sovereign Gold Bonds priced at Rs.4590/gram | Ø This is slightly lower than the April tranche that was priced at Rs.4639/gram with rebate for digital investment
Ø The SGB Series 2 will open for subscription on May 11 and will close on May 15 and offer a good equity hedge
|
| Ø India sees 7.57% growth in pharma exports in fiscal 2019-20 | Ø For FY20, the pharma sector achieved record exports of $20.58 billion; slightly short of the $22 billion target
Ø Pharma exports are expected to get a further boost in FY21 as the US has substantially relaxed its FDI policy
|
| Ø Bond yields are expected to see a sharp spike on higher borrowing targets | Ø With borrowing target raised by more than 50% this year, the rush for government borrowing could spike bond yields
Ø This is likely to largely neutralize the impact of the RBI rate cuts and push up the cost of borrowing for corporates |
| Ø Government raising huge monies from RBI via Ways and Means advances | Ø The centre’s WMA from RBI stood at Rs.1.66 trillion compared to just Rs.1.10 trillion in the previous week
Ø The WMA of state governments combined has also spiked from Rs.10.63 bn to Rs.38.23 bn in a span of just one week
|
| Ø Export contraction in April 2020 could be worse than March numbers | Ø Ministry of Commerce had reported 25% contraction in exports for March and April could be sharper
Ø Apart from the lockdown in most sectors, April exports are also likely to be hit by labour and logistical reasons
|
| Ø India eyes a major increase in share of the global plastic exports | Ø Currently India’s share of the annual plastics exports of $1 trillion just 1% while China is 10%
Ø With Coronavirus undermining China’s credibility, India is ramping up capacities to bridge the gap
|
| Ø Moody’s pegs India’s FY21 GDP growth at 0% on COVID-19 lag effect | Ø Moody’s has provided a best case scenario of flat GDP growth assuming growth recovers sharply in Q3 and Q4
Ø Moody’s has also retained the negative outlook and warned that India could be downgraded to Junk status
|
| Ø US unemployment spikes to 14.7%; the highest since the Great Depression | Ø This is largely on the back of severe job losses on the back of a spate of shutdowns in US businesses
Ø The unemployment rate was as low as 4% just one year back and now more than 30 million are availing jobless benefits
|
| Ø PFC could be sitting on potential bad loans to the tune of $6.5 billion | Ø This was pointed out by a detailed study of the power sector by an independent research body
Ø Nearly 20% of the loans give by PFC and REC to thermal power companies are likely to become bad in the next one year
|
| Ø Reliance may look to exit its $1 billion stake in Asian Paints | Ø This was held by RIL as an investment via its group company, Teesta Retail and is nearly 4.9% of APIL capital
Ø This is part of RIL’s larger plan to monetize all non-core assets to bring Reliance Group to zero net-debt by March 2021
|
| Ø SBI extends loan moratorium to NBFCs by another 3 months | Ø With the moratorium expiring on May 31, it would not really make sense as the lockdown is likely to extend longer
Ø With SBI taking the lead, other banks are expected to follow, giving the much needed respite for NBFCs
|
| Ø PMI manufacturing and PMI Services for April crash to all-time lows | Ø For the month of April, PMI Manufacturing fell vertically to 27.2 while PMI Services fell sharply to 5.4 levels
Ø This is clearly indicative of an economy at standstill with most sectors shut or operating at 50% capacity utilization
|
| Ø Banks may trying hard to find a buyer for the assets of Future Group | Ø The group is already deep in debt and has been making consecutive defaults on its debt repayments
Ø Rising interest costs, steep rentals and zero footfalls have brought that Future group to the virtual brink
|
| Ø MSME sector in India may be staring at 10 crore job losses in the near future | Ø MSMEs account for 25% of GDP output and nearly 40% of the total exports going out of India
Ø MSMEs have been asking for direct transfers for payment of wages and salaries; but government has not responded
|
