Sunday opened to one of the worst terror strikes in recent memory as terror returned to Asia; and this time it was Sri Lanka. A series of bomb blasts ripped Sri Lanka on the morning of Easter celebrations across luxury hotels and churches. As per the estimates put out by Reuters, over 200 are dead and more than 450 are gravely injured. Incidentally, April 2019 marks the 10th anniversary of the end of the Civil War in Sri Lanka after the LTTE was defeated. Sri Lanka has imposed curfew and strict social media curbs. Casualties are expected to rise in the coming days.
With the liquidity crunch, NBFCs are increasingly adopting the securitization route to monetize their loan portfolios. NBFCs and MFIs have seen 170% rise in securitization deals in fiscal year 2019. This sharp rise in the number of securitization deals was largely triggered by SBI’s decision to buy the NBFC/MFI portfolio worth Rs.45,000 crore, according to a report in the Business Standard. The NBFCs collected close to Rs.26,200 crore through securitization deals. The announced had been made by SBI in the aftermath of the liquidity crisis in 2018, as per a BS report.
Crude may be high but the market is betting on crude going much higher from here. Brent Crude long bets by hedge funds were sharply up in the first quarter of 2019. The Commodities Futures Trading Commission (CFTC) has confirmed that the total net long positions in Crude Oil futures rose by 10% on global and geopolitical concerns. While longs were up by 8.4%, the shorts were actually down by 6.5%. Brent crude has been hovering around the $72/bbl mark and is at the highest level since the sharp crash early this year. Brent Crude has rallied 40% from the lows and is currently quoting at $72/bbl.
Blackrock’s Larry Fink has ruled out any global slowdown in the next 12 months. While Fink admitted that the world economy may be in a late stage of the growth cycle, any downturn was unlikely in the next 1 year. According to Fink, central banks loosening policy in the fourth quarter should help extend the growth phase further. His statement came after IMF had downgraded global growth. Blackrock manages assets worth $6.5 trillion globally. Blackrock funds are largely managed through passive index based strategies across asset classes the world over.
The rally of the Nifty and the Sensex to new highs was driven by just 6 companies which added Rs.98,500 crore in market cap during the week. In a truncated week with just 3 days of trading, the Nifty and the Sensex managed to touch all-time highs. TCS was responsible for the maximum market accretion during the week followed by Reliance, HDFC bank, ICICI Bank, Infosys and Kotak. The stocks were also helped on their way up by FPIs infusing over Rs.11,000 crore into India in the first 3 weeks of April 2019. This infusion comes in addition to Rs.11,200 crore infused in February and Rs.46,000 crore in March taking the total infusion by FPIs since late February to $10 billion. In April FPIs infused Rs.14,300 crore into equities but withdrew Rs.3300 crore from debt supported by global liquidity.
Systematic investment plans (SIPs) on mutual funds yielded 10.26% CAGR in the last five years. This report was put out by NJ Wealth, India’s largest independent mutual fund advisor. The report underlined that these equity fund SIPs would have still outperformed gold, realty and bank FDs during the same period. In the last two years, the average inflows into Indian mutual funds via SIPs has doubled to Rs.8400 crore per month, showing vast retail appetite for equities. These returns are slightly lower than the Nifty returns during the same period, which was a tad above 11% without dividends.
