| News Announcement |
Impact Analysis |
| Oil supply faced a challenge as 70% of Gulf of Mexico oil facilities shut |
- This shutdown was necessitated by the Tropical Storm Barry that hit the Gulf of Mexico, the oil centre of the US
- This storm has also resulted in a sharp rise in crude prices to $67/bbl in the Brent market due to supply shortfalls
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| DHFL announces loss of Rs.2223 crore for March 2019 quarter |
- These are unaudited results and the audited results will be announced by July 22nd later this month
- The sharply higher losses were on the back of a Rs.3280 crore provision that DHFL had made on account of bad debts
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| Bond Yields dip lower to the 6.49% levels for the benchmark 10-year bond |
- The sharp fall in bond yields were driven by the Fed Chair Powell almost affirming a rate cut in the next meet
- The proposed $10 billion sovereign bond issue also pulled up prices of bonds and depressed yields
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| Global fund managers rushing towards negative yield bonds |
- This rush has become more pronounced after the BREXIT concerns in UK and rising Middle East tensions
- Negative bond yields create a major challenge for savers and pensioners as they do not get enough returns
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| D-Mart impresses the street with a sharp growth in profit margins |
- First quarter net profit margins of D-Mart stood at 5.8% compared to 5.5% last year and 4% this year
- EBITDA margins for the quarter also came in at an impressive 10.3% on better operational efficiency
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| Raghuram Rajan highlights risks in India’s sovereign debt plan |
- Rajan has pointed out that the sovereign bond issue could make India’s external ratings and currency fragile
- Sovereign bonds carry currency risk if the dollar appreciates and that is a risk the budget has not factored for
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| Infosys shows more robust growth than TCS in first quarter |
- The growth in profits and the operating margin performance of Infosys were better than TCS despite cost pressures
- Infosys also reported a 35% shares of digital revenues in the first quarter and large deals of $2.7 billion
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| Dow Jones and S&P 500 touch life times highs during the week |
- The sharp rally in the benchmark indices was driven by the optimism post the dovish statement by Jerome Powell
- The CME FEDWATCH has already been hinting at a very high probability of a rate cut in the July 31st Fed policy
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| IndusInd reports 38% growth in first quarter profits for June |
- The growth in profits was driven largely by the post merger impact of Bharat Financial (an MFI)
- However, the quality of assets in IndusInd’s core business remains under pressure with asset quality worsening
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| Income tax filing dates may be extended beyond July 31st |
- Normally, the CBDT has delayed filing dates to accommodate changes in the filing process
- The government may grant an extra month due to change in tax filing format and also the auto fill facility
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| SBI takes the lead in removing all charges on electronic transfer |
- The Union Budget had asked banks to waive all EFT charges and take the costs in their own books
- SBI has not only made the NEFT and RTGS transfer free of cost but even IMPS transfer will be charge free from August 01st.
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| Allahabad Bank reports Rs.1700 crore by Bhushan Power and Steel |
- Allahabad became the second bank after PNB to report a fraud by promoters of Bhushan Power to the RBI
- This has spooked the banks and is likely to negatively impact the interest shown by buyers in the IBC process
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| Ethanol blending could get a boost in India to take on EV challenge |
- Ethanol blending has come up after government asked auto companies to submit a timetable for EV shift
- While there have been tax sops for EVs in the budget, the industry may settle for more ethanol blending as a mid-way
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| Infosys completes localization target of 10,000 employees in the US |
- This localization was an outcome of commitments given by Indian IT companies on IT jobs creation
- This move has been responsible for a sharp rise in costs and a fall in OPMs for Infosys and other IT players
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| New amortization rules lead to massive outflows from liquid funds |
- Effective July 01st liquid funds have to provide amortization for paper above 30-day maturity from 60-day currently
- This has pushed low risk investors to banks and the higher risk investors to liquid plus and short term funds
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| Tata Steel plans to cut its debt further as a measure to reduce group debt |
- During the year, Tata Steel has cut debt by Rs.17,864 crore to Rs.100,816 crore via product rationalization
- The steel sector has seen a sharp fall in demand in the second half on the back of weak demand from auto sector
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| CPI inflation rises to an 8-month high of 3.18% for the month of June 2019 |
- The sharp rise in CPI inflation was largely driven by a rise in food inflation, which has been the ongoing trend
- However, experts feel this will not hamper the RBI efforts to cut rates in August as core inflation is still down
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| IIP growth for the month of May comes in lower at just 3.1% |
- This contrasts with 3.8% IIP growth in the year ago period and a sharply higher 4.3% in the month of April 2019
- The sharp fall was in manufacturing at 2.5% and these accounts for 77% of IIP basket. Mining was also weaker
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| FPIs may find it hard to dodge the higher tax surcharge incidence |
- The only option for FPI trusts is to convert themselves into corporates to avoid paying the higher surcharge
- However, any shift done to avoid tax will attract the provisions of the GAAR with its retrospective tax implications
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| China growth likely to fall to a 30-year low of 6.2% in current year |
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- This sharp fall in growth according to IMF will be driven by the trade war and the attack on shadow banking
- Weak Chinese growth is not great news for the world economy as China has been the engine of global growth
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| NRI deposits of $94 billion come up for redemption this fiscal year |
- Nearly 70% of total NRI deposits outstanding are maturing in the current fiscal year
- Normally, chunk of the deposits get rolled over but this could put pressure on the Indian rupee value
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