The dates for the General Elections are finally out. The Election Commission announced poll schedule for 2019 General Elections on Sunday. The elections will be conducted in 7 phases starting on April 11th and ending on May 19th. Out of the 543 Lok Sabha seats, elections for 374 seats will be conducted in 4 phases in April and the elections for the remaining 169 seats will be conducted in 3 phases in May. The final counting will be on May 23rd and results will be out the same day. Over 90 crore Indians are expected to vote this year; 10% more than 2014. The Election Code of Conduct kicks in immediately.
In a move that was long being debated, the RBI is likely to ban the dual roles played by credit rating agencies. RBI is expected to ban rating agencies from undertaking the dual role of rating agencies and advisors to corporates as it represented a genuine conflict of interest. This has come out starkly in the aftermath of the IL&FS fiasco when rating agencies were found wanting. The RBI is likely to address this issue in consultation with SEBI, as credit rating is under SEBI regulation. This conflict of interest has been a subject of debate on only in India but also globally after the financial crisis of 2008.
According to an ICRA report, the auto ancillary industry is likely to see moderation in growth to 10-12% in FY20 from higher levels of 15%. While rupee depreciation will exert pressure on the imports, rising cost of inputs will put pressure on operating margins. The industry is also facing the risk of dumping from China on products like alloy wheels for which the industry has already approached the government. On the demand side, the auto ancillary has been trying to adapt to the slowing trucks market and the massive global shift out of Diesel cars after the Volkswagen fiasco.
The Indian government invited Saudi Arabia to invest in its strategic oil storage facilities even as it tries to revive the $44 billion refinery project in Maharashtra. The 60 MT refinery-cum-petrochemicals facilities had been de-notified by the Maharashtra state government over land allocation issues. India has built strategic reserves of 5.33 MT; enough to meet 9-days demand. The Union Budget in 2014 and 2015 had spoken extensively about the need to create strategic petroleum reserves to protect interests in the event of any short supply in oil.
Nifty top 8 stocks added Rs.91,000 crore market cap during the week just gone by. Sensex gained over 600 points despite the tepidness in the last two trading sessions. The market value accretion happened despite Trump withdrawing Indian exports from the General System of Preferences (GSP) and the MSCI hiking China’s weight in the Emerging Markets Index at the cost of India. The big boos also came from Foreign Portfolio Investors infusing Rs.2740 crore net in 5 sessions of Mar-19. This infusion comes on top of Rs.15,000 crore infused in the last 6 trading sessions of February. In fact, infusion in equities in March was to the tune of Rs.5621 crore but nearly Rs.2880 crore of bonds had been sold by FPIs. FPI investments in equities are indicative of confidence ahead of general elections.
Don’t call it dichotomy; call it business judgement said IBBI as it justified its decision in the Binani and Essar cases. The Insolvency and Bankruptcy Board of India (IBBI) underlined that both the decisions were aimed at value maximization. While the IBBI had entertained a higher bid in Binani Cements, the same was not permitted in Essar Steel. In both the cases, the decision of the Committee of Creditors had been overturned. However, the Essar offer was rejected as it did not abide by the rules of the game. While Binani was sold to Ultratech, Essar Steel went to Arcelor Mittal.
