The Hinduja brothers are likely to bid for Jet Airways. Earlier, the Hinduja brothers had demanded huge haircuts on the loans which the banks were not willing to offer. This time around, the banks were left with just one bidder, Synergy Group of South Africa. Since the Synergy group had asked for more time to conduct due diligence, the banks thought it fit to also get more competing bids. The Hinduja brothers of UK will be putting in their before the 15th of January when the deadline for bidding expires. Jet ceased operations in April 2019 and SBI has been trying since then to find a suitor for Jet Airways.
In continuation of its Operation Twist, the RBI conducted its second round of OMOs to the tune of Rs.10,000 crore. While buying long duration securities was to the tune of Rs.10,000 crore, the RBI simultaneously sold Rs.8,500 crore worth of short term securities. Over the last one week, this action has been instrumental in reducing the bond yields on the benchmark bonds and also narrowing the yield gap between the short end and the long end. This move has also benefited the banks as a fall in the long term yields has led to a rise in the bond prices, leading to capital appreciation.
Brent Crude prices inched close to the $69/bbl mark before settling lower at around the $68.50/bbl mark. The sharp rise in the crude prices was driven by the recent supply cut enhancement by OPEC by an additional 0.5 million bpd. In addition, the markets are rife with expectation that the trade deal should become a reality sooner rather than later. There has also been some fall in crude inventories, which has also helped the crude prices. In addition, the geopolitical situation in the Middle East has also been volatile and that has been adding to concerns over oil movement, pushing up prices further.
SEBI has decided to cut its external benchmark rate (EBR) by 25 basis points to 7.8%. It may be recollected that RBI had asked all the banks to benchmark their loans to an external benchmark effective from October. That has resulted in seamless reduction in deposit rates and consequently transmission to lending rates. This fall in EBR will result in a fall in home loan rates for SBI floating rate borrowers. SBI has apparently decided to cut the rates after the RBI maintained status quo on repo rates in the December meet. Banks are not betting on further dovishness if inflation stays high.
Tata Motors has turned out to be the star performer among the large caps in the December quarter. The stock rallied by a whopping 54% during the December quarter as compared to a mere 7.5% rally in the Sensex during the December quarter. While clarity on BREXIT was a big trigger for Tata Motors considering its predominant UK and European operations, there were also other factors at play. The rally in Tata Motors was also attributed to a better than expected rally operational performance by Jaguar Rover during the September quarter. Despite the slowdown in sales in the UK and the US as well as China, JLR saw a sharp recovery in sales in its key markets. Analysts are also globally betting on the big shift that Tata Motors is attempting to environment friendly electric cars in the near future.
The government once again extended the deadline for linking PAN and Aadhar from December 31 to March 31, 2020 as the time was too short to enable the process. While PAN linking with Aadhar has been mandatory for quite some time, the government has postponed the deadline for preventing people from filing returns unless PAN is mapped to Aadhar. The process is quite simple and can be down online but it has been pending in a lot of cases. In a significant judgement in 2018, the Supreme Court declared Aadhar as not mandatory for all purposes except in the case of PAN for tax return filing.
