| News Announcement |
Impact Analysis |
| Brent crude closed the week near the $62/bbl mark |
- Brent has gained nearly 20% from the lows touched in the month of December2018
- Despite US supply crossing 12 million bpd, OPEC cuts are likely to keep crude oil prices above the $60/bbl mark
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| Sun Pharma stock crashes to close at a 5 year low on the stock exchange |
- The stock has been on a downward spiral since 2015 due to the worries surrounding pharma margins
- The recent sharp correction to a new low was on the back of serious corporate governance issues pertaining to promoters
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| Government likely to miss divestment target by nearly Rs.20,000 crore |
- The government had set a target of Rs.80,000 crore for the year but had achieved only Rs.32,000 crore till December
- With elections approaching, the government may not too keen to push through divestment aggressively
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| China announces $85 billion stimulus to prop up GDP growth |
- The steps were taken after the exports and imports of China fell sharply on the back of the ongoing trade war
- Economists are already projecting Chinese full-year GDP growth to fall below 6.3%
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| The rupee weakens to 71.20/$ on fiscal deficit worries |
- The rupee has fallen close to Rs.2 in the last couple of weeks after the government hinted at the farm rescue package
- With divestment and GST revenues likely to fall short by Rs.1.2 trillion, there may be a huge spike in the fiscal deficit
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| Jet Airways saga continues as Naresh Goyal refuses to cede control |
- The fracas started after Etihad agreed to infuse equity into Jet at 50% lower valuation compared to the CMP
- Etihad had called for Goyal to step down, but Goyal has given a counter offer with an infusion of Rs.700 crore
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| SBI Life reported 15% higher profits at Rs.254 crore in the third quarter |
- This reflects the pace at which private insurers are taking away market share from LIC (now below 70%)
- SBI Life has an AUM of Rs.135,000 crore and the insurer has managed to move well beyond its ULIP business
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| Wipro reported 35% growth in consolidated net profits in Q3 |
- This profit growth was supported by a 10% growth in the top line revenues too; better than expectations
- The company also announced a bonus issue which was already anticipated by the markets
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| Fundraising at NBFCs is back in the big bulge bracket |
- IIFL is raising Rs.2,000 crore and Edelweiss is raising a massive Rs.9,200 crore for its ARC business
- It indicates that for the big bulge NBFCs, availability of funds is really not a major challenge
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| Kotak Bank stake sale hearing deferred to March 12th by High Court |
- Kotak had filed write petition against the RBI on its objection to Uday Kotak diluting stake through an issue of PNCPS
- The court case is more on the lines of a form versus substance debate on the interpretation of the dilution rule
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| CII has requested RBI for 50 bps cut in repo rates and CRR |
- CII has asked RBI to step in to bring down rates and also ensure sufficient liquidity for the Indian banks
- The calls for rate cuts have become a lot more strident after retail inflation came in an 18-month low of 2.19%
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| Reliance is the first Indian company to cross Rs.10,000 crore profits in one quarter |
- RIL reported a 55% rise in net revenues and an 8.82% growth in net profits for the quarter
- Refining, petchem, retail and the much-touted telecom outperformed during the quarter
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| The US steps up pressure on China-based technology companies |
- The US may ban the sale of equipment to Chinese companies like Huawei and ZTE on business violations
- This is likely to worsen the trade war and has already been condemned by China as being provocative
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| Mutual funds may be allowed to write covered calls against positions |
- Covered call entails selling higher call options against cash market holdings so that upside risk is contained
- However, there are still curbs at a stock-specific level which may make expansion of volumes difficult
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| SBI puts up Rs.15,000 crore of Essar debt on the auction block |
- ARCs and NBFCs have been invited to bid for this block at a minimum reserve price of Rs.9,588 crore
- There is an NCLT bid available next year and SBI has discounted that price by the IRR of 18%
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| PWC warns of negative fallout of stringent e-commerce curbs |
- The government recently prevented foreign e-commerce players from owning the channel or exclusive marketing
- PWC estimates that the overall impact of this move could cost $46 billion as e-commerce business
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| The trade deficit for December 2018 came in lower at $13 billion |
- While there was a 20% fall in gold imports and lower crude prices, exports were also quite tepid
- This is worrisome because it leaves India with limited leeway if the Make in India program does not take off
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| Finance ministry asks PSBs to bring down government stake to 52% |
- This is in line with the SEBI requirement to leave at least 25% of the free-market float in public hands
- The government may be looking at this move more to raise funds ahead of the Union Budget and the elections
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| India likely to overshoot fertilizer subsidy by $4.2 billion this year |
- This has been triggered by the global fall in the price of fertilizers and also the weak Indian currency
- The government may look at a special banking arrangement to bridge this gap as the ministry has refused to take it up
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| RBI warns of MUDRA loans as the next big NPA challenge for banks |
- Since MUDRA (small loan scheme) was launched total loan disbursals are to the tune of Rs.246,000 crore
- RBI has warned that the lag effects of GST and note ban could create problems for these companies on cash flows
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| `Economists raise serious questions about the 3.3% fiscal deficit target |
- The shortfall in divestment revenues itself is likely to push up the fiscal deficit to 3.5%. Then there is GST shortfall
- Economists worry that the generous dole outs in the budget could only worsen the fiscal deficit
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