| News Announcement |
Impact Analysis |
| Nifty crashes below the 11,450 mark and loses 600 points post Budget |
- The correction in the market sharpened on Friday over fears of a prolonged liquidity crunch in the economy
- Apart from weak global cues, markets were also disappointed that the government was unwilling to review the FPI tax
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| Geopolitical situation gets a little more tense in the Middle East region |
- The situation got tense after Iran actually seized a couple of British tankers near the Strait of Hormuz
- Iran had threatened to block the Strait of Hormuz after the US had imposed sanctions on Iran to block oil sales
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| 10-year bond yields touch a multi-year low of 6.25% during the week |
- Bond yields have been sharply down ever since they broke the 7% mark on dovish cues from the US Fed
- With the CME FEDWATCH hinting at a strong likelihood of a 50 bps rate cut on July 31st, bond markets see yields sinking
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| HDFC Bank reported 21% growth in net profits for Q1 at Rs.5,568 crore |
- Net interest income (NII) grew by 23% during the period even as the net interest margins (NIM) was stable at 4.3%
- Gross NPAs in the quarter were marginally up from 1.3% to 1.4% and the bank also declared a special dividend of Rs.5
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| Jet’s resolution professions invite expression of interest by August 03rd |
- The EOI will be for the remaining assets of Jet Airways which will be hived off as part of the settlement
- Jet currently has 14 aircraft (down from 124), 49% in Jet Privilege and real estate properties to hive off
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| Grant Thornton raises serious concerns over IL&FS audit |
- Thornton pointed that rating agencies had assigned high ratings to IL&FS despite knowing about its failing financials
- According to Thornton, employees of IL&FS had connived with rating agencies to ensure good ratings
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| Brookfield likely to invest Rs.25,000 crore in Reliance Tower Trust |
- The infusion will give Brookfield a 100% stake in the company that now holds the assets of Reliance Jio Infratel
- The investment will be subject to requisite government approvals as it will transfer ownership to a foreign entity
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| Deloitte Haskins and BSR, former auditors of IL&FS, challenge ban |
- The government had filed a petition with the NCLT for a 5-year ban on DHS and BSR for shoddy IL&FS audit
- The auditors have questioned the jurisdiction of the NCLT to adjudicate on the matter
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| IMD warns that deficient rainfall looms over half of Indian sub-continent |
- The rainfall situation worsened with the 20% monsoon deficit reported in the month of July 2019
- In addition, SKYMET has also predicted that the next 2 years could see drought like conditions in India
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| SEBI calls for greater transparency in auditor resignations |
- SEBI has objected to the recent cases of arbitrary resignations by the auditors of listed companies
- SEBI wants a more detailed explanation of such resignations especially if they happen in less than 1 year of appointment
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| Indigo spat takes a toll on stock price despite excellent results |
- Problems started when the Gangwal group raised questions about the functioning of the Bhatia group in the board
- As a compromise, Indigo may expand the board but the overhang of the dispute remains on the stock price
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| Vodafone Idea to wind down Aditya Birla Payment Bank |
- This marks the second major player to exit the payments bank business after Mahindra group also opted out of it
- The restrictions on pure Aadhar based banking has put limits on the ability of payment banks to attract deposits
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| SEBI tweaks disclosure norms for bank NPA divergence disclosure |
- From a 15% divergence needing disclosure, SEBI has now asked banks to disclose if the divergence is 10%
- Disclosure also become mandatory if the Gross NPAs move up by 10% as compared to 15% earlier
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| FPIs infuse Rs.6500 crore into Indian debt since the Union Budget |
- This has been in contrast to the equity segment, where FPIs have been consistent sellers
- With global yield falling, the high real rates on the Indian bonds and the a stable currency are favorable
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| Nirmala Sitharaman rules out any relief for FPIs on super-rich tax |
- The higher surcharge on earnings above Rs.2 crore will also hit FPIs that are structured as trusts in India
- The FM has offered the opportunity to convert into corporate structure but refused any concessions to FPIs
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| Bankers have sought more detailed forensic audit of Jet books |
- A detailed forensic audit demand was based on a basic audit conducted by Grant Thornton
- The forensic audit showed signs of round tripping an example being the undisclosed loan to Jet Lite worth Rs.3000 crore
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| US Consumer spending growth comes in stronger than expected |
- US Consumer Spending growth came in at 0.4% as against street expectations of a mere 0.1%
- This data point is unlikely to change the Fed outlook on cutting rates on July 31st, although quantum of cut is unknown
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| Crude spends a volatile week in the global Brent market |
- Crude prices gyrated between $67/bbl and $62/bbl on global uncertainty over Iran, US supplies and Chinese growth
- Chinese growth fears pulled down the price of oil even as the tensions in the Strait of Hormuz offered support to oil
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| Market history may favour mid caps according to Kotak Mutual Fund |
- According to KMF, on previous occasions in 2008 and 2011, mid caps had corrected sharply on global factors
- However, in the next one year, the bounce in mid caps was almost to the tune of 100% from lower levels
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| Trade deficit narrowed marginally to $15.28 billion for June 2019 |
- While imports were lower, the real worry for India would be the 9.7% fall in exports on weak global trade
- Even as global trade weakens, this puts a big question mark over the Make in India efforts of Indian government
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| Economists raise concerns over low inflation in India |
- A group of economists and bankers in India have voiced concerns over consistent low inflation
- They aver that low inflation could be precursor of weak growth and consumption as shown by weak IIP numbers
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