The much touted sovereign bond issued planned by the Indian Government and announced in the Union Budget may finally take off in October 2019. The $10 billion sovereign borrowing program announced by the government is likely to go through in October this year according to a report in Business Standard. Economists and policy makers have warned that dollar debt would expose the Indian government to currency risk. However, there is a huge appetite for Indian paper with nearly $13.4 trillion worth of debt stuck in negative yields and Indian bonds offer high real yields and also a relatively stable rupee.
HDFC and SBI may be having an issue over the BKC property of Jet Airways. The bankruptcy case took a new property twist and a new dimension after HDFC and SBI claimed rights over the BKC property of Jet Airways. Earlier HDFC had moved the NCLT to keep the BKC property out of the bankruptcy process as 3 floors of the property were mortgaged by Jet to HDFC. SBI meanwhile has filed an intervention plea against this move, which will come for hearing on August 04th. The onus will be on NCLT to decide with the rights of HDFC as a mortgage holder supersedes the rights of all financial creditors of Jet.
In a first of its kind move, the Telecom Panel approved $442 million penalty on Airtel and Vodafone Idea. The Government Telecom Panel appointed to investigate into the interconnect allegations made by Reliance Jio has approved a penalty of Rs.3200 crore ($442 million) on Bharti and Vodafone. This penalty is for not providing sufficient inter-connect points for Reliance when it was launched in 2016 which is mandatory under the Telecom rules. Reliance Jio had filed the complaint in 2016 that Bharti, Vodafone and Idea were blocking their calls landing on third party networks.
A man who is known for his tough talking, Boris Johnson, promises a bold new deal for BREXIT. Boris Johnson, the new prime minister of Britain, has promised that he would manage to exit the EU smoothly by October 31st. Johnson will take a distinctly tougher stance when it comes to negotiating with the EU on BREXIT terms. Johnson also added that if Brussels chose to act tough then UK would be happy to leave the EU without a BREXIT deal in place. Johnson hast just 99 days in hand. Theresa May of the Conservative party had to resign after repeated attempts to pass the BREXIT deal bill failed.
Even as the Nifty and the Sensex saw negative returns for the fifth day in succession, the IMD announced that the monsoons for the third week of July were 35% below normal. There was little rainfall in the central, western and northern parts of India during the week. This has raised issues of Kharif output this year, farmer incomes, rural demand and of higher food inflation. To add to the problems, FPIs pulled out $1.70 billion from Indian equities in July, after nearly 5 months of consistent FPI inflows into India. This was triggered by risk-off shift across the world as well as macro uncertainty. However, in the Indian context, the FPIs have been unhappy with the new FPI surcharge introduced in the budget. FPIs continued to remain net buyers in bonds for their attractive real returns.
Notwithstanding the geopolitical uncertainty in the Middle East, crude oil fell by more than 1% on Wednesday. Oil prices had been extremely volatile in the last few days and had shown hardening tendencies post the stand-off in the Middle East between Iran and the West. On Wednesday, the US oil stock piles also declined sharply but despite these hardening cues, the crude prices were lower. That was largely because of global slowdown fears and the likely impact on oil prices. Global slowdown has been a major overhang on oil prices since the US-China trade war escalated.
