According to a report by World Bank, overall debt in emerging markets has touched a record $5 trillion. The World Bank report has underlined that the sharp rise in emerging market debt has been largely driven by easy liquidity maintained by global central banks combined with low bond yields. However, the World Bank has pointed out that rising yields and slower growth in most emerging markets could means that the impact of this debt mountain could easily get magnified. World Bank has underlined that the weak macros in most EMs could make the debt a much bigger worry than for developed markets.
With the NCLAT passing an order to reinstate Cyrus Mistry as the chairman of Tata Sons and also rejecting the proposal of Tata Sons to convert into a private company, there is hope of an exit for Cyrus Mistry. The Mistry family holds an 18% stake in Tata Sons, which is estimated to be worth $17 billion at current valuations. Since Tata Sons will now have to remain a public limited company, Cyrus Mistry gets an opportunity to exit their holdings in Tata Sons. The ball is now in the court of Mistry family whether they want to exit their stake in Tata Sons or not. Mistry family has held this stake for many decades.
The Monetary Policy Committee (MPC) announced the minutes of the monetary policy discussion announced on 05 December. In a surprise move, the central bank had opted to maintain status quo on rates, even as the markets were anticipating a 25 bps rate cut. However, the MPC opted to maintain the stance of the monetary policy as accommodative. Two things emerge from the MPC minutes. Firstly, the risk of inflation was the key reason why the rate cut was shelved and that was borne out by inflation coming at 5.54% for November. Most MPC members also felt the inflation uptick was ephemeral.
It is said that every impeachment does not automatically result in removal of the president of the US. In fact, the previous impeachment of Clinton and Johnson did not result in removal of the president. While the impeachment was passed comfortably in the House of Representatives, it is unlikely to pass muster in the Senate due to the Republicans having a majority. However, the successful impeachment of the president in the HOR could really cloud his chances of running for a second term as president. Global markets have been jittery as any such move could jeopardize the trade deal with China.
Sugar stocks have rallied sharply in the last couple of months and the one reason has been the sharp fall in supply of sugar during the current season. Sugar output in the current cycle is down by 35% to just 4.58 million tonnes as of December. The reasons include flooding in the second largest sugar producing state of Maharashtra, sustained farmer protests and loan waiver. Even the largest sugar producing state of Uttar Pradesh saw production down by 10% and that is also pushing up the prices of sugar in the domestic market. Sugar prices have also been driven by other reasons. The overall sugar output of Brazil has also been lower than normal. Government continues to give export incentives to Sugar mills and that helps these sugar companies to get better sugar prices overall. Glut has been rectified.
UTI AMC has filed with SEBI for an offer for sale (OFS) as some of the leading financial institutions look to sell their stake in UTI AMC. The sellers in the OFS include SBI, Bank of Baroda, PNB, and LIC; while T Rowe Price will also offload part of it is stake in the AMC. However, UTI has lost its leadership position and is now the seventh largest player in the market. Hence it is unlikely to get anywhere close to the kind of valuations of HDFC AMC or even Nippon Life AMC. However, the revenues and the EPS of UTI AMC have been on a consistent downtrend. UTI will be the third AMC to hit the Indian market.
