In the now infamous Axis Bank quarterly results leak case, the regulator SEBI has asked Axis Bank to conduct a detailed probe into the accident. It was found out that Axis Bank quarterly results had been leaked at least a few hours before its actual announcement and was being shared via WhatsApp groups. This is an offence SEBI Act as information pertaining to the quarterly results has to be announced in a public forum first. According to SEBI, the WhatsApp circulated numbers were either exactly matching with the actual figures or were inexplicably close. That had raised the needle of suspicion.
With the RBI the size of the last five bond issuances from Rs.5000 crore to Rs.15,000 crore, it is clear that the government is likely to overstretch its borrowing target by Rs.50,000 crore this fiscal. That is something that will worry the markets and especially the bond markets. However, the government plans to compensate for this higher bond borrowing by reducing its short term treasury bills bearing by an equal amount. However, since short term rates are liquidity driven and long term rates are supply driven, it is more than likely that the yields on G-Secs may go up further.
Uday Kotak expects the volume of share sales in 2018 to top the level of 2017. This is a telling comment considering that 2017 was already a record year for new issuances with over $12 billion being raised during the calendar year. The coming year is likely to see some mega fund raising by marquee names like Tata Steel, HDFC and HDFC Bank. This massive rush to raise capital is a good sign as it indicates that finally the capital cycle may be showing signs of turning around. Of course, investors are also betting big time on equity markets in the hope that finally the NPA problem may be laid to rest.
As India prepares for a busy assembly election schedule in 2018 following by the general elections in 2019, the big theme could be all about wooing the rural voter. The big lesson from Gujarat appears to be that rural India is unhappy with very few jobs being created and their liquidity being impacted by the twin forces of demonetization and GST. Already surveys are suggesting a weaker vote share for the BJP in rural areas and that could become the theme for the party’s election campaign. Rural spending, rural jobs, farm distress, crop distress and farm incomes could be dominant themes in the coming year.
A day after the markets celebrated RCOM’s exit from the Special Debt Restructuring (SDR) scheme of banks, UCO Bank has clarified that RCOM will be allowed to exit the SDR only after stated monetization process takes concrete shape. RCOM had promised to monetize its towers business and the optical fibre network along with the real estate inventory to substantially reduce the debt of the company. The company was also to announce a plan of action for reviving its core business in future. RCOM had promised to close all its transactions by March 2018. However, even in the past RCOM had promised to resolve the debt issue by September 2017 by monetizing its tower assets as well as its deal with Aircel. Subsequently, both the deals fell through, which could be the reason for UCO Bank’s scepticism.
After a frenetic rally in crude oil following the key pipeline blast in Libya, oil prices did turn tepid on Wednesday. Oil had touched a 2½ year high of $67 in the Brent crude market and there were worries that oil could actually breach $70/bbl. However, this looks unlikely as this level is likely to see substantial additional supply of oil leading to lower prices. Also, oil investments are gathering speed while oil demand is not yet picking up in a big. This could further tilt the gap in favour of the supply leading prices lower. Most oil experts are betting on oil getting closer to the $60 mark soon.
