| News Announcement |
Impact Analysis |
| India imposes 200% import duties on goods imported from Pakistan |
- This was a reaction to the ghastly terrorist attack on CRPF Jawans on 14th Feb in which 44 personnel were killed
- In the aftermath of the attack, India withdrew its Most Favoured Nation (MFN) status accorded to Pakistan
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| India becomes top buyer of Venezuelan crude in the month of February |
- Venezuela is already India’s third-largest crude supplier after Saudi Arabia and Iraq
- The US recently imposed sanctions on Venezuela to force the Maduro government out of power
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| Avendus Capital eyes $1 billion fundraising to tap the ESG investors |
- Avendus is backed by KKR, one of the largest private equity players in the world
- ESG entails investing in companies that are environmentally friendly, socially responsible and maintain governance
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| Nifty and Sensex fell for 7 days in succession on valuation worries |
- The A/D ratio was clearly negative during the week with the mid-caps bearing the brunt
- Apart from higher crude prices, domestic pledged shares also put pressure on the market overall
|
| RBI lifts a cap on FPI investments in corporate bonds |
- This was broadly laid out in the credit policy statement announced last week where 20% limit was scrapped
- Now FPIs will have the discretion to decide how much they want to exposure to debt of a single group
|
| RBI has pulled up Yes Bank for making the confidential report public |
- Last week, Yes Bank had divulged that the RBI had affirmed that there was no divergence in the Yes Bank numbers
- RBI has pulled up Yes Bank for selectively disclosing part of a report that was supposed to be explicitly confidential
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| India’s trade deficit in January came in higher at $14.73 billion |
- This is sharply higher than the deficit of just $13.08 billion reported for the month of December 2018
- While exports had moved up, the imports grew much faster despite crude prices being relatively lower
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| Infibeam is back to facing problems with its auditors |
- Auditors of Infibeam had raised some governance questions over advances given to vendors
- This became all the more suspect as the advances were routed through subsidiaries, a serious governance issue
|
| US-China trade talks appear to have made progress in the week |
- The right noises appear to be coming from China and the US on the gradual resolution of the trade war
- While Trump was briefed by the Trade Representative, not too many details of the likely pact were divulged
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| US and Iran have come down heavily on Pakistan for abetting terror |
- The US has openly batted for India’s right to protect its integrity and take necessary military action
- Iran has warned Pakistan after a similar attack on the Iran Guards even as Saudi has canceled a business delegation
|
| CPI and WPI inflation came in much lower during January |
- While CPI inflation touched an 18 month low of 2.05%, even WPI inflation came in lower at 2.76%
- CPI inflation was down due to weak food and fuel inflation. However, core inflation remained high at 5.4%
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| Crude prices moved above the $65/bbl mark during the week |
- The sharp rise in crude prices was driven by supply cuts promised by Saudi Arabia and the OPEC
- The sanctions on Venezuela also spooked markets and took the prices of crude higher
|
| The rupee weakened beyond the 71/$ mark on crude concerns |
- With crude above $65/bbl, the pressure on the INR was apparent. Consistent FII selling also put pressure
- The rupee is likely to come under further pressure after the trade deficit for January widened
|
| Parliamentary Panel wants the detailed investigation into LIC in IL&FS fiasco |
- The panel has raised doubts over the efficacy of LIC as the largest shareholder of IL&FS
- The panel noted that the LIC neither took precautionary steps nor warned about the impending crisis
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| Parliamentary panel also calls for a review of credit rating methodology |
- The panel has now called for multiple ratings for the same instrument to avoid bias
- The panel has also suggesting shifting to user paid ratings rather than issuer-paid ratings for bond instruments
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| NCLT restarts the Amtek Auto resolution process |
- The restarting was necessitated after Liberty House backed out of the deal on grounds of inadequate disclosure
- However, the NCLT is proceeding legally against Liberty House and now the resolution has a timeline of just 140 days
|
| A total of 2942 companies have pledged Rs.214,000 crore of shares |
- Pledged shares have become the bane for the markets after mid caps and small caps corrected sharply
- The Pledge ratio continues to be above 80% in many cases and this limit is normally the flag off for a crisis
|
| IIP growth for December came in lower at 2.4% |
- Weak manufacturing was the key reason for a tepid performance by the IIP number overall
- Manufacturing accounts for 76% of IIP and also has larger implications for the GDP growth number
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| NCLAT gives time till Feb 19th to resolve the Essar insolvency crisis |
- The crisis began after Essar promoters a higher counter bid after the COC accepted Arcelor bid at Rs.42,000 crore
- Ruias have the support of the operational creditors, who are normally shortchanged in most NCLT resolutions
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| The government expects all banks to exit PCA by June 2019 |
- Prompt corrective action (PCA) was launched for banks with high levels of net NPAs and weak balance sheets
- Removal from PCA will enable these banks to again built their loan books and also undertake business expansion
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| Income Tax department withholds Rs.1 trillion of corporate tax refunds |
- While there has been no official word, the withholding of refunds appears to be a tacit policy to manage liquidity
- However, delayed refunds have a cost since it attracts interest and also impacts working capital for companies
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