The rupee almost celebrated the dovish outlook given by the US Federal Reserve by appreciating nearly 70 paisa to a level of 69.70/$. This is the first time since October that the rupee has strengthened beyond the 70/$ mark. At its worst it had crossed the 75/$ mark. The rupee celebrated the dovish outlook of the Fed despite the 25 bps rate hike, which was already factored in. Weak oil prices combined with falling benchmark bond yields in India and the US have helped the INR to strengthen substantially from its October lows. A lot will now depend on how the CAD pans out in the coming months.
ONGC has decided to contribute to the divestment targets of the government through its Rs.4000 crore buyback of shares. ONGC will repurchase 1.97% stake or a total of 25.29 crore shares at a price of Rs.159/share. Against its full year target of Rs.80,000 crore via divestments, the government has only managed Rs.34,000 crore till date. The buyback has not been received very well by analysts as they see this as pressuring ONGC after the HPCL stake buy. ONGC is already running a total debt of more than Rs.1.11 trillion and that makes its short term outlook shaky at a time when crude prices are falling.
SEBI is seriously Sandbox approach to technology developments in the stock markets. A Sandbox is basically the concept of trying out on a small scale before implementing on a much larger scale. This essentially provides learning curve before adopting a particular technology or a system. The equity and derivatives markets have seen tremendous technology impact in the form of internet trading, app based trading, algo trading, low latency trading and DMA. In the Sandbox environment, such advanced technologies can be suitably tested on a small scale so that systemic risks can be avoided.
In what could be a big boost to banks in India, the government plans to infuse an additional Rs.41,000 crore into bank capital. The total infusion for 2018-19 will thus go up from Rs.65,000 crore to Rs.106,000 crore. The government appears to be going aggressively to help the banks stand up again. They have already hinted at four banks coming out of Prompt Corrective Action (PCA). In addition, this big boost to recapitalization of banks will allow these banks to once again start their lending operations and thus return to profitability. This infusion will be done through supplementary funding.
As the carnage in crude oil continued, the price of Brent Crude fell below the psychological mark of $55/bbl. This marks a 17-month low in oil prices and this level was last seen in July 2017. The 25 basis points rate hike by the Fed raised fears that it could actually lead to a slowdown in growth and impact oil demand. Oil demand has stayed at over 100 million bpd but now it is likely to fall below the mark and result in excess supply. The situation is seen becoming worse if high rates and a trade war combine to put pressure on global growth. Apart from these risks, most traders are also avoiding risky assets especially after the US saw an inversion of the yield curve. Oil also fell sharply after it emerged that the surplus shale supply would largely compensate for the 1.2 million bpd supply cuts by OPEC and Russia.
Bharti Airtel’s Nilanjan Roy will take over as the Chief Financial Officer (CFO) of Infosys effective March 01st 2019. Nilanjan comes to the task with rich experience. He has spent the last 13 years at Bharti Airtel and spent another 15 years prior to that working across global locations of Unilever. In the last few years, Infosys has seen a constant churn in the CFO role and hence it will be critical to see how long he stays in the job. Prior to Ranganath resigning from Infosys, there had been a spate of resignations and that had raised some doubts in the minds of analysts and investors. Stability may be the need of the hour.
