| News Announcement |
Impact Analysis |
| The IL&FS effect takes its toll on the markets during the week |
- Mutual funds started offloading bonds of other NBFCs following the IL&FS fiasco
- IL&FS has borrowings to the tune of $12.5 billion and could have a spill over effect on the markets
|
| DSP fund sells Rs.300 crore of DHFL bonds at 11% yield |
- This was the move that shocked the markets on Friday as the selling happened at a huge discount like a distress sale
- In the midst of the Rs.300 crore selling by DSP MF, the DHFL stock lost close to 50% of its market value in a single day
|
| World Gold Council expect 25% growth in gold demand in Q2 |
- The sharp surge in gold demand is likely to be triggered by the higher agricultural income due to 150% assured MSPs.
- Each year, India consumes nearly 900 tonnes of gold and nearly 70% of the demand is from rural areas
|
| Trump’s second round of $200 billion tariffs take effect on Monday |
- This takes the total of tariff-able goods from China to $250 billion or nearly half of the US imports from China
- China has retaliated with counter tariffs and has also refused to sit on the negotiating table with Trump and team
|
| Markets expecting a rate hike again in the October RBI policy |
- Nearly 40% of the CII surveyed businesses are expecting a 25 bps hike in the repo rates in October
- The higher rates will be necessitated by higher inflation and a sharply weaker rupee
|
| HDFC twins start quoting and trading below the 200 DMA after a long time |
- The sharp fall was in line with fall in all financials in India across the board on valuation concerns
- Apart from the IL&FS exposure angle, markets are also wary of valuations after the Goldman Sachs downgraded
|
| The US Fed meets on 26th of September to decide on Fed rates |
- The US Fed is broadly expected to hike rates by 25 bps in September on higher inflation and growth
- The CME Fed Tool monitor is also assigning a 95% probability to a 25 bps rate hike in the September 26th meet
|
| Fitch has revised the rating outlook for Tata Motors to negative |
- The downgrade was sparked by negative free cash flow expectations due to capex commitments of JLR
- The rating agency is also worried that a slowdown in Chinese demand and BREXIT woes could hit JLR sales
|
| Government proposes to merge BOB, Vijaya Bank and Dena Bank |
- While BOB gets the benefit of a quality book from Vijaya, the combined reach will also be much larger
- As the 3rd largest bank in India gets created, Dena Bank will naturally come out of Prompt Corrective Action
|
| Yes Bank tanked by nearly 30% on Friday due to top brass woes |
- RBI has refused to permit Rana Kapoor to continue at the helm beyond the stipulated date of 31st of January
- That is likely to be a negative for Yes Bank’s fund raising plans in the absence of Kapoor at the helm
|
| Brent crude gets closer to $80/bbl on supply concerns |
- Despite pressures to hike OPEC output from the US, most OPEC nations are already operating at full capacity
- With the sanctions in Iran effective from November, the OPEC output is likely to suffer a lot more
|
| RBI intervenes to stem the rupee fall at the level of 73/$ |
- The rupee touched a low of 72.966 during the week before the RBI intervened to protect the rupee
- The RBI may also have limited room with a rising trade deficit and dwindling forex reserves, already below $400 billion
|
| ADAG group may opt out of the telecom business completely |
- RCOM plans to give up on telecom altogether due to the extremely low margins in the business post Jio
- RCOM will now focus on the realty business which will include the development of the DAKC in Navi Mumbai
|
| SEBI board agrees to compress IPO timelines further |
- The IPO completion time has been compressed further from 6 days to just 3 days
- To overcome the banking challenges, SEBI is also likely to permit IPO applications through the UPI route
|
| SEBI also dealt a blow to mutual fund AMCs by cutting expense ratios |
- The upper end of the range has been cut and SEBI will also force more rational pricing by the AMCs
- Two of the large listed AMCs, HDFC MF and Reliance MF, reacted sharply with losses post the announcement
|
| Government has hinted that there could be more bank mergers |
- After the BOB initiative, the government may look to merge more such PSU banks under this formula
- Apart from rationalizing costs, this merger will also enable the banks to achieve economies of scale
|
| IL&FS may require a quick bailout by the government or by the LIC |
- With more defaults coming up, there is a fear that the contagion may spread to other NBFC debt paper
- LIC has a 25% stake in IL&FS and may be eventually called upon to bail out IL&FS from the liquidity mess
|
| GST collections in August likely to be lower than July collections |
- The lower GST collections are likely to be triggered by lower rates effective from August
- Also, the floods in Kerala are likely to have an impact on demand which will show up in lower GST collections
|
| Goldman Sachs downgraded Indian equities to Market Weight |
- This is significant because it was the first time Goldman had downgraded India in the last 4 years
- The downgrade is due to a mix of rich valuations and concerns over higher bond yields, trade deficits and weak rupee
|
| DLF targets to be a zero debt company by March 2019 |
- The company has just around Rs.7,000 crore of debt left which will be wound down by March
- DLF will be stopping pre-sales altogether and only focus on sale of its current completed inventory of Rs.14,000 crore
|
| RBI may be forcing itself into a policy dilemma by delaying NRI scheme |
- Unlike in 2013, the RBI seems to be dragging its feet on the NRI special deposit issue
- If the rupee has to recover it needs a sharp infusion of dollars and RBI support can only be for a limited period
|
