In a late week development, Infosys announced the appointment of Mr. Salil Parekh as the new MD & CEO of Infosys. The top job was being temporarily held by acting CEO Pravin Rao, who will not go back to his old role of COO of the company. It may be recollected that after Vishal Sikka resigned from Infosys due to stark differences with the board, Nanda Nilekani was brought in to fray investor nerves. Salil Parekh has had a sterling record ushering cutting IT and digital transformation during his 2-decade stint at Cap Gemini. However, it may all eventually boil down to the board’s equations with the promoters.
India readies for anther monetary policy this month when the Monetary Policy Committee meets on the 5th and 6th of December. The credit policy will be announced on 6th afternoon after the meet concludes. The broad consensus appears to be of a status quo on the rates front as inflation has remained above the 3.5% mark in the last couple of months. With oil and food inflation remaining sticky, inflation is unlikely to fall sharply despite lower GST rates announced by the Council. The MPC will also be watching out for the outcome of the Fed Policy meet in mid-December for future direction on interest rates.
Foreign portfolio investors (FPIs) poured in Rs.19,700 crore into Indian equities during the month November, largely a reaction to the positive rating upgrade accorded by Moody’s. This is an 8-month high after India saw FPI inflows of Rs.30,906 crore in March this year. Apart from the Moody’s upgrade, the foreign investors are also positive on the massive bank recapitalization announced by the government, which will largely address the NPA issue. Even the GDP numbers announced on November 30th have hinted at visible green-shoots of recovery in the manufacturing and services sector.
The SEBI inquiry into the NSE co-location case appears to be getting murkier with the recent decision to involve the Serious Frauds Investigation Office (SFIO) also into the picture. While the ED has already conducted raids at the premises of a major NSE broker as well as the former heads of NSE, the coverage may not extend to many more such brokers as well as officials who are believed to have been in connivance with the perpetrators of this algo scam. It is also suspected that the co-location scam may also entail a larger nexus and flow of slush funds may also be involved in the entire process.
The highly controversial yet highly anticipated Tax Bill got through the US senate over the week end. This is the first step towards a major tax overhaul that the Trump government had promised to the Americans as part of his presidential campaign. The tax bill includes a sharp cut in rates of corporate taxation and temporary tax deferment for individuals. The eventual vote was a 51-49 vote as the Tax Bill sailed through the Senate with the narrowest of margins. The Trump administration intends to make this Bill a reality by Christmas this year. The Tax Bill was much sought after as it was supposed to give a major boost to the US economy by reducing corporate taxes drastically. The tax cut, along with the proposed infrastructure boost, was the key rationale behind the Trump rally.
In one of the debt restructuring undertaken in the sugar industry, lenders agreed to restructure the $1.3 billion debt of Bajaj Hindustan. The restructuring is being done under the Scheme for Sustainable Structuring of Stressed assets (S4A). Under the scheme, nearly 50% of the debt of $1.3 billion has been classified as sustainable and will be restructured with better rates and tenure. The 50% which is being considered as unsustainable will result in issue of Optionally Convertible Debentures (OCDs) to the lenders and will also result in promoters diluting their stake from 26.02% to 15.43% in favour of lenders
