| News Announcement |
Impact Analysis |
| Nifty gains over 500 points during the week ended November 02nd |
- The sharp rally in the Nifty was largely driven by reconciliation of the US-China trade war and Iran oil exemptions to India
- Banking, metals and auto stocks were among the major gainers even as pharma and IT remained under pressure
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| US grants exemption to 8 nations from ban on Iranian oil imports |
- India, Korea and Japan are among the nations to be exempted from Iran ban. India can pay Iran in rupees for oil
- India is the second largest importer of oil from Iran after China and Iran has been a source of cheap oil for refiners
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| Trump hinted at a likely end of the US-China trade war based on negotiations |
- Both Trump and Xi have given up their intransigent stands and China may also be allowed to import oil from Iran
- China has been on the throes of a slowdown and a final announcement is expected during the G-20 summit
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| Brent crude prices edge lower towards $73/bbl during the week |
- Brent crude fell sharply after US agreed to tone down sanctions on Iran by giving exemptions to exports
- The price of oil has now corrected nearly 15% from peak on worries that the trade war would lead to growth slowdown
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| Apple shares crash on slowing I-Phone sales worldwide |
- With fears of a global slowdown and tepid Chinese demand, Apple is finding it hard to maintain sales momentum
- After the disappointing results in the Sep quarter, Apple stock has crashed below the $1 trillion market cap mark
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| ONGC reports 61% rise in Q2 net profits at Rs.8265 crore |
- Despite a dip in oil production, ONGC benefited from higher crude prices globally which touched a high of $86/bbl
- Its average price realization in the quarter was $73.07/bbl compared to $49.43/bbl last year
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| Next few months likely to be challenging for NBFC liquidity |
- NBFCs have nearly $10 billion worth of commercial paper to be redeemed in the next 2 months
- Most NBFCs will have to resort to bank loans, refinance and also asset sales to tide over the liquidity crisis
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| SEBI passes Rs.813 crore disgorgement order against Satyam promoters |
- Nearly a decade after the Satyam scam broke out, SEBI has asked Raju and 3 others to pay up Rs.813 crore
- This represents the unlawful gains made by the promoters along with interest. Their debarment for 14 years stands
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| RBI permits partial credit enhancement of NBFC bonds |
- This partial credit enhancement will enable the NBFCs to get access to bank liquidity to roll over their loans
- NBFCs have become systemically important and the RBI would want to avert a crisis, especially after the IL&FS fiasco
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| Manpasand Beverages loses over 80% since auditor resignation |
- Manpasand has seen a sharp rise in trade receivables and a worsening of the working capital cycle in last one year
- Manpasand borrowings have also increased by nearly 50% in the last one year, predominantly short term facilities
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| Analysts have cut target prices for 70% of the stocks during October |
- This only pertains to the 276 stocks tracked by more than 10 analysts. On a larger scale, this could be much bigger
- Target cuts have been prominent for downstream oil, NBFCs and for specific stocks like Dish in the DTH business
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| HDFC reports a 25% jump in profits in Q2 at Rs.2467 crore |
- This seems to be an interesting performance considering that most HFCs have been under pressure in October
- Apart from growing the top line at 25%, HDFC also managed to keep its NPAs under check
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| FPIs pull out nearly $17 billion from EM equities in October |
- This risk-off trade was triggered by fears of a global trade war, weakness in China and higher prices of oil
- India alone saw FPI selling of Rs.35,000 crore in October taking full year FPI selling to above Rs. 1 trillion
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| CRISIL expects aviation companies to report Rs.9300 crore losses this year |
- Ironically, this is coming at a time when the global aviation industry is likely to report $33 billion in combined profits
- Higher competition, higher ATF prices and a price war have led to these airline companies bleeding
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| India rises to 77th spot in the Ease of Doing Business ranking |
- This is a rapid growth from being at the 142nd spot in 2014 and has been driven by simpler rules and processes
- The implementation of GST and the success of the bank resolution through IBC has given a boost to rankings
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| Italian PM justifies his expansionary budget and refuses to compromise |
- This intransigence was an outcome of the EC sending the Italian budget for reconsideration
- Italy has refused to give up on its profligate ways and that is something Spain, Portugal and Greece had done in the past
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| BOB and Union Bank report positive growth in the quarter |
- There appears to be a clear indication that the NPA cycle may be bottoming out as indicated by the reviving profits
- Additionally, the NCLT is also likely to lead to a write back of Rs.1 trillion of loans which are already provided for
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| Realty projects worth $63 billion could be in limbo due to NBFC squeeze |
- Most of the realty companies had been relying on NBFCs for funding after RBI barred banks from subvention schemes
- With NBFC liquidity tightening, realty companies are likely to be crunched for funds in the short term
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| Banks feel the heat of exposure to the IL&FS loan book |
- After Yes Bank, IndusInd Bank also took sharp price cuts after they disclosed Rs.3000 crore exposure to IL&FS
- IL&FS has already missed Rs.400 crore of debt repayments and the resolution may still be a good 9 months away
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| CRISIL expects big pharma companies to return to double digit growth |
- This growth is likely to be triggered by a turnaround in demand in the principal US market which is 35%
- US is expected to return to positive demand growth after nearly 5 years of negative growth
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| Ruias make an offer to pay off all their debt post asset monetization |
- A day after the Committee of Creditors ruled in favour of Arcelor, Ruias offered to pay off all the debts
- While the offer may hint at no haircuts, banks are unlikely to buy into the argument as it would undermine NCLT process
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