| News Announcement |
Impact Analysis |
| RBI maintains status quo on repo rates at 6.50% in December policy |
- The RBI held rates considering low inflation and growth rates not picking up in the second quarter
- However, the RBI chose to maintain the monetary stance at “Calibrated Tightening” hinting at future rate hikes
|
| Retail and MSME loans to be pegged to external benchmarks |
- Effective April 2019, banks will be required to peg their loans to benchmarks like T-bill rates rather than MCLR
- The RBI had tried this in the past but it had been difficult to implement benchmarks other than the MCLR
|
| OPEC sets crude supply cuts at 1.20 million barrels per day |
- OPEC nations will contribute 8 lakh barrels and non-OPEC nations like Russia and Mexico will put in balance cuts
- Brent crude prices have crashed by $86/bbl to 60/bbl and this move should provide some support for crude prices
|
| Exit polls give Congress an edge in the state of Rajasthan |
- Most of the exit polls appear to be hinting at a clear win for the Congress in Rajasthan on the back of anti incumbency
- However, the results of Madhya Pradesh and Chhattisgarh appear a lot more mixed and will have to await Dec 11th
|
| US shale producers may benefit from the supply cuts imposed by OPEC |
- With OPEC cuts hinting at higher prices of crude, US shale producers may have reason to turn to profitability
- Shortly after the supply cut announcement, the crude prices shot up by 6% and that has given hope to shale producers
|
| US markets saw one of their sharpest falls during the week |
- Market weakness was driven by fears that the trade war with China may worsen in the days to come
- The recent arrest of the Huawei CFO in Canada is also likely to strain relations between China and the US
|
| The US yield curve turns inverted for the first time in the last 10 years |
- An inverted yield happens when the long term yields are lower than the shorter term yields reflecting uncertainty
- In 1998 and 2005, an inverted yield curve in the US has resulted in a recession within the next 2 years
|
| Current account deficit (CAD) rises to 2.9% of GDP in second quarter |
- This implies a 100 bps rise in the CAD in 6 months and has been driven by weak exports and higher oil prices
- However, with crude oil prices falling more than 30% from recent highs, the next quarter CAD should be better
|
| India to double ethanol blending to 8% in the 2018-19 sugar season |
- Currently India blends less than 4% ethanol, but this could change with better prices offered by the OMCs
- Even a 4% increase in ethanol blending will save crores for the Indian economy in forex paid for oil imports
|
| Market rife with the news of Buffett buying a stake in Kotak Bank |
- The stock was up by nearly 10% after it was reported that Buffett could buy a stake in the bank
- The promoter, Uday Kotak, has been looking to reduce his stake in the bank in line with RBI stipulations
|
| PFC to buy government’s 52.6% stake in REC for nearly Rs.11,000 crore |
- The idea was to merge the two power financers to ensure better synergy and lower cost of funds
- The move will also help the government to get closer to its divestment target of Rs.80,000 crore for the current fiscal
|
| Indian steel stocks see 15% correction in last 3 months |
- The sharp correction in steel stocks was driven by a global fall in steel prices and a rise in input costs
- While the correction was lower in case of Tata Steel, stocks like SAIL and JSPL corrected almost 30% in 3 months
|
| Inflows into equity mutual funds fall 33% MOM in November |
- This is the lowest monthly inflow into mutual funds in a long time and was largely driven by volatile market conditions
- However, the SIP flows have been less affected compared to the bulk flows. Debt flows have been robust
|
| Trump’s trade tariffs may only be worsening the trade deficit |
- The monthly trade deficit for the US came in at $55.5 billion in November, higher than October despite stiff tariffs
- Interestingly, China alone accounts for 80% of the total trade deficit of the US, which perhaps explains the Trump dilemma
|
| Jet Airways seeks $350 million soft loan from Etihad Airways |
- Etihad, which owns 24% in Jet, has expressed willingness to fund up to $200 million via soft loan
- Jet has also been looking at getting Etihad to increase its stake up to the maximum permissible 49% mark
|
| Hindustan Unilever touched an all time high during the week |
- The stock price rose sharply after the stock was upgraded by analysts following its purchase of GSK Consumer
- At a market cap of Rs.4 trillion, HUVR is already among the most valuable companies in India
|
| UK government loses BREXIT vote by a margin of 321 to 299 |
- This would put Theresa May in a defensive position and she will have to give more powers to the UK Parliament
- If the BREXIT happens without a deal then it could lead to a virtual crash of the UK Pound and GDP growth
|
| Kesoram to demerge its tyre unit into a separate company |
- Existing shareholders of Kesoram will be issued shares in the ratio of 1:1 in the new company
- Tyres account for 39% of Kesoram revenues and separating it will help the company get a better valuation
|
| ICICI Securities launches instant payout of sale proceeds to clients |
- This is part of a tie-up between ICICI Securities and BSE and the funds will be made available within 30 minutes of sale
- This facility will be subject to a ceiling of Rs.50,000 per day for a registered client
|
| Manufacturing PMI was buoyant at 54 after a long time |
- This indicated a clear expansion of manufacturing activity with a positive momentum compared to the previous month
- This rise in PMI was led by fresh orders flowing in as well as higher production and more jobs created
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| Axis Bank and Marico bag maximum analyst upgrades in November |
- Axis Bank benefited from a management shift and also from positive traction in managing NPAs
- LIC Housing, MGL and Cadila Healthcare were among the stocks that got more than 3 upgrades during November
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