| News Announcement |
Impact Analysis |
| GDP estimates by MOSPI for 3rd quarter came in at 7.2% annualized |
- This shows a sharp turnaround from the level of 5.7% in the first quarter and 6.5% in the second quarter
- However, the full year GDP is likely to hover around 6.6% and the bet will now be on reverting to 7.5% in 2018-19
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| Manufacturing PMI for February falls to a 4-month low of 52.1 |
- While PMI above 50 is still expansionary, the challenge is that the momentum is falling after a 5-year peak in December
- The good news, however, is that the recruitments are also picking up in manufacturing apart from inventory build-up
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| Aircel files for bankruptcy under the weight of Rs.15,500 crore debt |
- The doors were largely closed for Aircel after its proposed merger with RCOM fell apart on regulatory concerns
- Aircel becomes the first major victim of the massive price war in telecom following the launch of Reliance Jio
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| Core sector growth for January came in at 6.7%, 70 bps lower than December |
- Interestingly, all the 8 components of the core sector showed positive growth for the month of January
- The big takeaway is sharply positive growth shown by cement and refinery products, both with strong externalities
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| NSE assures orderly transition of global indices post the data supply ban |
- NSE has stuck its stand of barring data sales despite threats from the MSCI about a possible downgrade
- Global exchanges can now come through the GIFT City in Gujarat and SGX has already taken the lead
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| Nirav Modi’s Firestar Diamonds files for bankruptcy in the US |
- Firestar is the centre of the massive $2 billion fraud that was perpetrated on PNB in collusion with the Nirav Modi group
- With senior banks of other banks also being interrogated, the scam is likely to spread much wider
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| Fed Chairman, Jerome Powell, hints at more aggressive rate hikes in 2018 |
- The first rate hike is expected to come as early as March with 3 more rates likely in the year
- A 100 basis points rate hike could have major implications for risk-off flows from emerging markets like India
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| Oil analysts expect the crude rally to continue well into 2020 |
- The 1.8 million bpd supply cut by Russia and OPEC is likely to continue for some more putting pressure on oil supply
- With US bond yields going up, raising cheap funds to finance shale expansion is no longer going to be easy
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| ACC and Ambuja plan to put off their merger plans for now |
- This is likely to be negative for both the stocks as markets were betting on the merger for better synergies
- The companies believe that a merger at the current juncture may not add much to their competitiveness in the sector
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| The long hand of the law may be finally catching up with Singh Brothers |
- Delhi High Court has already ordered the attachment of unencumbered assets of the Singh Brothers
- They also have a Rs.3500 crore arbitral award against them filed by Dai-chi for non-disclosure of critical information
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| Morgan Stanley takes a contrarian bullish view on US bonds |
- In fact, MS expects the US bond yields to come down from 4.5% currently to a level of 3.25% by year end
- This bullish view on US bonds is in contrast to the bearish view of Warren Buffet and other bankers like Goldman and Citi
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| Government imposes import duty on Chinese ceramic ware and kitchenware |
- This is largely in the nature of anti-dumping duties especially imposed on Chinese products
- Chinese companies, allegedly, get incentivized to produce and supply goods at below their cost of production
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| Warren Buffet raises valuations concerns in his annual letter |
- Buffett has admitted that Berkshire Hathaway stayed off acquisitions due to fairly rich market valuations
- Buffet is also wary of the 100 bps rate hike this year and has been wary of any fresh acquisitions till there is clarity
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| Dropbox to file for IPO with tentative valuation of $10 billion |
- Dropbox was the pioneer of cloud storage and file sharing with over 500 million registered users
- Dropbox is likely to largely utilize the funds raised to defray some of its high cost debt in the books
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| Dow Jones Index cracks during the week on trade war fears |
- Trump has promised to use tariffs to discourage imports from other countries and encourage US companies
- This is a big concern as large US corporations derive a chunk of their revenues from global operations
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| Most auto companies reported stellar sales growth in February 2018 |
- This was largely driven by the base effect as Feb 2017 was just about coming out of the impact of demonetization
- Two wheelers, passenger cars, HCVs and even tractors saw record growth numbers in the month of February
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| Indian cabinet has approved the Fugitive Economic Offenders Bill |
- This bill allows the government to take over all the assets of defaulters like Nirav Modi who flee the country
- Interestingly, this will also extend to benami assets owned by the defaulter as well as those held through proxies
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| US passes an interim order favouring Nirav Modi’s Firestar |
- This order will prevent creditors from collecting debt that Nirav Modi’s Firestar owes after it filed for bankruptcy
- Firestar had filed under Chapter 11 of the US Bankruptcy Code which automatically disables any collection efforts
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| Arcelor Mittal and Nippon Steel to jointly bid for Essar Steel |
- Essar Steel is one of the companies that has been referred for liquidation under the IBC
- While the tentative valuations is $6 billion, it will provide a massive capacity boost in Indian steel space
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| SBI hikes lending rates as the liquidity situation tightens in the market |
- SBI increased its loan rates by 10-25 basis points but it clearly sets the direction for other banks in India to follow
- The liquidity in the system which was net positive since demonetization has now turned into a deficit
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