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Posted on 15-Mar-2019 Comments  0

Weekly Capsule (Mar 11– Mar 15) and Impact Analysis

News Announcement Impact Analysis

HDFC Bank also joined the $100 billion market cap club HDFC Bank became the third Indian company to cross the mark of $100 billion terms of market capitalization

Earlier, Reliance Industries and TCS were the companies that are already in the $100 billion market cap club

Jet Airways rejig plans to be finalized within the next one week Jet has been in the midst of a massive cash crunch and that has led to many planes grounded in India

The rejig will involve PE funds and Etihad increasing the stake in Jet and Naresh Goyal ceding control of the airline

Mindtree founders could use buyback plan to block takeover bid The bid by founding promoters of Mindtree came after L&T Infotech was in advanced stage to take over Mindtree

Mindtree may use the buyback route to make the acquisition of Mindtree more expensive for the potential buyer

NCLAT strikes down Ruia offer to buy out Essar Steel for Rs.54,389 crore In its order, the NCLAT upheld the order of the NCLT Ahmadabad bench to let Arcelor Mittal be the buyer

The NCLAT has also asked the Committee of Creditors to give a better deal for the operational creditors of Essar Steel

Indian airfares shoot up after the grounding of 737 MAX Boeings The flaw in the design of the 737 MAX came to light after the cash of the Ethiopian Airlines

India has already asked all 737 Max flights to be grounded and it is expected to cost Boeing $7.5 billion for rectification

Trade deficit narrows to $9.59 billion for the month of February The lower trade deficit was driven by a rise in exports supported by a sharp fall in imports on weak oil prices

This sharp fall in the trade deficit will benefit the rupee and will also ensure that full year trade deficit is below $200 bn

RCOM could be in trouble as NCLAT refuses to direct SBI to release funds RCOM had sought Rs.260 crore out of the refund money to pay as compensation to Ericsson of Sweden

However, SBI had objected to this decision of giving special privilege to an operational credit at the cost of banks

FIIs pump in nearly Rs.35,000 crore into equities since Feb 20th Equity markets saw the sharpest rally in FII flows leading the Nifty and the Sensex to the best rally in four months

Sharp FII flows were driven by greater political certainty, earnings expectations and improved liquidity conditions

Sensex crossed 38,000 gets close to all time highs on the index The sharp rally in the Nifty and Sensex was driven by aggressive buying by FIIs even as domestics sold

After the surgical strikes, the winds are expected to be favourable for the ruling NDA, which is seen as a positive

Pipeline stake sale to help Mukesh Ambani reduce debt by Rs.16,400 cr The stake in the pipeline transportation business will be bought by an InvIT floated by Canadian investors

This will help the Mukesh Ambani group to substantially reduce its private debt

RBI permits HDFC to own only 9.9% stake in Bandhan Bank This stake holding will be an outcome of the proposed merger of Gruh Finance into Bandhan Bank

HDFC had sought approach to own 14.96% but NBFCs are only permitted to hold up to 9.9% in private banks

Balanced funds see outflows of Rs.1077 crore in February This marked the highest outflows from balanced funds in a month during the last 10 years

According to experts, these negative flows were due to a combination of reclassification and mis-selling

China refuses to classify Masood Azhar as a terrorist at the UNSC This is the fourth time that China has stood up to protect the interest of Pakistan and shield a terrorist

However, in a show of solidarity, France has agreed to freeze the bank accounts and properties of Masood Azhar

Fed rate hikes may be off but bond portfolio is a big question The Fed may have to soon take a decision on unwinding its $4 trillion bonds portfolio, though fresh purchases have ceased

Unwinding of the bond portfolio would imply a sharp liquidity crunch across the world as liquidity gets sucked in

The Indian rupee strengthened very close to the 69/$ mark on Friday The strength in the rupee has been largely driven by sharp surge in FII inflows to the tune of $5 billion since Feb-20th

Exporters have also shown greater willingness to bring in the dollars and lower trade deficit will also help

CPI and WPI inflation come in sharply higher in February CPI inflation came in at 2.57% and WPI inflation at 2.93%; sharply higher than market estimates

Higher inflation was largely driven by a bounce in food inflation even as core inflation remained sticky

IIP growth for the month of January came in weak at 1.7% This sharply lower than the 7.5% in Jan-18 and was largely driven by weak manufacturing data

A weak IIP growth combined with reasonable inflation does make case for the RBI to cut rates on April 04th

First REIT to be launched with an IPO worth Rs.4750 crore on 18th March Embassy group of Mumbai will launch this REIT with the support of Blackstone of the US

Pre offer bids have been quite strong from institutions and it will be the first REITS in India

RBI opts to infuse liquidity via $5 billion worth of swap bonds Swap bonds will be issued worth $5 billion on 26th March and will exchange bank dollars for rupees

This will prevent the rupee from appreciating sharply and also infuse rupee liquidity depressing short term yields

Mutual fund SIPs in February came in higher at Rs.8095 crore This was a major positive considering the outflows in debt fund flows and sharp fall in equity fund flows

SIPs are retail infusion into equity / ELSS funds and there are more than 2 crore SIPs active in India today

Mutual funds show distinct preference for PSU stocks in February Stocks like SBI, NTPC, Bharat Electronics were among the preferred stocks of large mutual funds

The interest in PSUs was driven by higher dividend yields and also a turnaround in PSU banking stocks



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