| News Announcement |
Impact Analysis |
| RBI maintains status quo on repo rates at existing level of 5.15% |
- This retains the reverse repo rate at 4.90% and the MSF and bank rate at 5.40%
- This was contrary to street expectations which had factored in a rate cut of at least 25 basis points
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| RBI highlights rising inflation as the key risk for a rate cut |
- CPI inflation had touched a high level of 4.6% with food inflation touching a 39-month high of 6.9%
- MPC also expressed the concern that with the OPEC raising its oil supply cuts, fuel inflation could trend higher
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| RBI sets full year GDP growth target at a level of 5% |
- This assumes an average GDP growth of just about 5.25% in the second half of the current fiscal
- The downward revision in GDP was largely driven by HF indicators like IIP and core sector dipping into negative
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| RBI raises the P2P lending overall limit per lender to Rs.50 lakhs |
- This marks a five-fold increase in the overall lending from the current level of just Rs.10 lakhs
- However, the RBI has retained its current limit per borrower with a view to diversifying the P2P lending portfolio
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| There was total unanimity among the MPC members to hold rates |
- All six members agreed to hold rates and there was also total consensus on keeping the stance as accommodative
- After a break of the last few policies, the MPC also included inflation as a key criterion apart from boosting growth
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| Forex reserves crosses $450 billion for the first time in Indian history |
- The reserves have shot up sharply in the last one year after dipping to below $400 billion in late 2018
- The sharp rise in forex reserves was due to limited RBI intervention required in the forex markets
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| Moody’s downgrades Yes Bank’s outlook to negative during the week |
- Moody’s has raised some serious concerns over the ability of Yes Bank to raise the required equity capital
- Yes Bank core capital ratio has fallen to 8.7%, marginally above the statutory requirement of 8%
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| Auto component turnover falls by 10% in the April-September period |
- Auto components have borne the brunt of the slowdown in the auto industry in the form of job losses
- Apart from auto production cuts, the shift to BS-VI norms has also put pressure on the auto components industry
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| NEFT system will be made available by RBI on all days of the week |
- The online money transfer system will also permit transfers on all holidays from December 16th
- NEFT is an economical yet efficient mode of transferring funds to another bank account electronically
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| Government hints at a likely rate hike in GST slabs across the board |
- The GST 5% slab is likely to be moved to 10% while the GST 12% slab is expected to be moved up to 18%
- While timelines are not yet set, this has become inevitable due to the plummeting GST revenues in last two years
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| Japan puts forth a $240 billion economic stimulus plan |
- According to Shinzo Abe, this booster will be used to fight the slowdown triggered by the ongoing trade war
- Japan’s action may trigger similar action from other central banks too as fiscal and monetary measures could be mixed
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| OPEC likely to cut supplies of crude further in tandem with Russia |
- OPEC plus Russia are likely to increase the supply cut from 1.2 million bpd to 1.6 million bpd or more
- This is likely to give a floor support for oil prices and could also indirectly help Saudi Aramco IPO list at attractive levels
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| SAT refuses to grant any relief to Bajaj Finance and other lenders to Karvy |
- Bajaj Finance had approached SAT after SEBI had asked NSDL to annul all share pledges by Karvy and returned shares
- While the investors have got their shares back, sellers are yet to realize the proceeds of their sale from Karvy
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| Goldman Sachs makes a strong case for diversifying portfolios with gold |
- Gold prices have fallen nearly 6% in the recent past after trade deal hopes boost markets across the board
- However, Goldman has suggested that investors must use this opportunity to increase gold holdings as a hedge
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| Asset Reconstruction Companies to take auction route to acquire NPAs |
- According to RBI guidelines, all bank NPAs will now only have to be sold through auction and not privately placed
- With Rs.9.5 trillion of NPAs still in the system, this could ensure a more transparent method of pricing NPAs
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| SEBI asks SBI, BOB and LIC to pare stake in UTI AMC to below 10% |
- This is mandatory as per the extant regulations but SEBI has given them time till end of 2020 to pare the stake
- UTI AMC has been eyeing the IPO market and could use this route to give an exit to institutions and also list shares
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| Saudi Aramco shares to list and start trading on December 11th |
- The IPO had valued Aramco at $1.71 trillion and was the largest IPO with the richest valuation
- Aramco has been trying to push for higher crude price so as to get Aramco a valuation of closer to $2 trillion on listing
|
| Kumaramangalam Birla hints at closure of Vodafone Idea over AGR issue |
- Birla has hinted that in the absence of any relief from the government, the company may have to be wound up
- Vodafone Idea needs to pay Rs.30,000 crore to DOT for AGR charges apart from spectrum usage fees
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| Bharti Airtel creates $4 billion war chest to pay off the AGR dues |
- Bharti Airtel has raised bonds worth $4 billion to pay off its dues under Adjusted Gross Revenue (AGR) issue
- Bharti Airtel had already written off this sum in its second quarter results posting a record loss of Rs.27,000 crore
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| IL&FS reports net loss of Rs.22,572 crore for fiscal 2018-19 |
- This only reflects part of the losses from depletion in its portfolio and the full figure may be much larger
- Total revenues for the year more than halved while the total assets of the company were down by 83%
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| Government may dilute FDI regulations to facilitate sale of Air India |
- Current FDI regulations do not permit foreign ownership in Indian airlines in excess of 49%
- In the case of Air India, a one-off relaxation may be required to make the deal sweet for the global airlines
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