| News Announcement |
Impact Analysis |
| Fitch downsizes India’s full year GDP for fiscal 2019-20 to just 4.6% |
- This downsizing comes after Moody’s had pegged India’s full year GDP at 4.9% and the RBI had pegged at 5%
- Fitch sees pressure on the GDP growth emanating from weak consumption and tepid private investment demand
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| Diesel rates hiked for third successive day; petrol prices stay constant |
- The serial hike in diesel prices has been necessitated due to a sharp spike in global crude oil prices in the Brent market
- The only challenge is that diesel prices have strong levels of externalities in India and can be clearly inflationary
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| RBI may resort to bond yield twisting to bring down bond yields |
- Bond yield twisting was necessitated after 10-year bond yields spiked sharply on the back of status quo on repo rates
- In bond yield twisting, the RBI will sell bonds at the short end and purchase bonds at the long end of the yield curve
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| UTI AMC has filed DRHP for a Rs.3000 crore offer for sale in the IPO market |
- UTI AMC’s offer for sale will include sale of shares by BOB, PNB, SBI, LIC and its foreign promoter, T Rowe Price
- There is a beeline of AMCs waiting to hit the IPO market after HDFC AMC and Nippon AMC got fancy valuations
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| Pre budget meetings with the FM focus on SMEs, NBFCs and consumption |
- There have been demands to cut personal taxes and also corporate taxes to 15% to boost spending
- There have also been demands for a rescue package for NFBCs, which could have a catalytic impact on lending
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| NCLAT order calls for Cyrus Mistry to be reinstated as chairman of Tata Sons |
- In a relief for Cyrus Mistry, NCLAT declared appointment of Chandra illegal and ordered reinstatement of Mistry
- This order will only be effective after 4 weeks to give Tata Sons time to explore legal options, if any
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| NCLAT also rejected the decision by Tata Sons to turn private limited |
- The conversion to private limited company would have made it hard for Mistry family to sell their shares in Tata Sons
- Now the ROC will have to pass an order to convert Tata Sons back into a public limited company as per NCLAT ruling
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| Nifty and Sensex scale to life time highs during the week |
- The sharp rally was driven by global cues as there was positive progress on the China trade deal and also on BREXIT
- The MSCI revamp also meant that an additional flow of $2.5 billion would come into India; further boosting markets
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| Anand Mahindra to step down from the helm of Mahindra Group in April 2020 |
- Anand Mahindra of the $20 billion conglomerate will assume charge as non-executive chairman of the overall group
- Senior officials like Pawan Goenka, Rajesh Jejurikar, Anish Shah and V S Parthasarathy will share responsibilities
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| Government rules out any price cut in next round of spectrum auctions |
- The next round of spectrum auctions in April 2020 will fetch Rs.5 trillion payable over a period of 2 years
- The success of the spectrum auctions will largely depend on the cash flow position of telecom companies next year
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| Gita Gopinath urges India to focus on medium term fiscal consolidation |
- Gita Gopinath of the IMF has asked India to keep fiscal discipline to ensure that sovereign ratings are not impacted
- This warning came after India looked all set to breach its fiscal deficit limit this year on the back of weak revenue growth
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| Bharat Bond ETF got oversubscribed by nearly 1.7 times in its maiden issue |
- The first bond ETF in India got subscriptions to the tune of Rs.12,000 crore and they have a greenshoe option
- The Bond ETF is a passive bond investment pegged to an underlying bond index (representing PSU debt)
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| IBC process helps banks recover nearly Rs.160,000 crore in 3 years |
- IBC was introduced to help banks recover money from loans extended to stressed companies via a sale process
- The IBC overall has been able to realize nearly twice the liquidation value of all these businesses put together
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| SAT asks SEBI to pass order on Axis Bank in Karvy case by 15th December |
- This pertains to the pledge of client shares done by Karvy to obtain loans from banks including Axis Bank
- In the previous cases of Bajaj Finance and ICICI Bank, SEBI had rejected claims pertaining to revocation of transfers
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| Vedanta likely to evaluate making a bid for acquiring BPCL |
- Agarwal of Vedanta had already stated that they would be interested in acquiring a major stake in BPCL
- Vedanta already has large exposures to aluminium, copper, zinc and crude and refining will be a logical extension
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| Jet Airways insolvency extended by 90 days on request from biddersq |
- The request was made by the sole potential bidder, Synergy Group as it needed more time to evaluate the offer
- Jet had been grounded back in April and has not been flying since. Most of its planes have been impounded by lessors
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| Brent Crude continues to trade around the $66.50/bbl mark |
- Brent crude has been consistently elevated due to the OPEC setting supply cuts at 1.7 million bpd from 1.2 million bpd
- Crude prices have also gone up due to hopes that the trade deal and BREXIT could be favorable for crude oil demand
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| MPC minutes on December 19th clearly focused on the inflation risk |
- Most MPC members felt inflation was temporary but saw logic in going slow on rate cuts till inflation stabilized
- Even on the growth front, the consensus was to allow fiscal policy measures to play out on growth before further cuts
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| US House of Representatives approves Trump impeachment motion |
- However, the impeachment needs to also pass through the Senate; where Republicans have a majority
- However, even if he is impeached by both houses, it does not mean that Trump would be removed from the presidency
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| GST Council meeting holds GST rates but hikes levy on lotteries |
- Contrary to popular belief, the GST Council stayed away from hiking GST rates as it would have been inflationary
- Lotteries across India have been standardized at 28% GST and the hike was put to vote for the first time
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| Scrapping of IUC has been put off by one year to December 2020 |
- The inter-connect user charges (IUC) entailed paying 6 paisa for every call that lands on the network
- Bharti, due to its legacy network, has the highest IUC income and this is likely to continue for another year
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