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Posted on 26-Jul-2019 Comments  0

Weekly Capsule (Jul 22 – Jul 26) and Impact Analysis

News Announcement Impact Analysis

Donald Trump now plans to tax French Wines imported into the US The trade war was triggered by France announcing a digital tax on US companies operating in France

Trump has promised to retaliate with a tax on French Wines, which has a very big market in the US

Iran situation continued to remain tense with tanker seizure Iran seized two British tankers near the Strait of Hormuz in retaliation to a similar action by the UK

While Trump has issued a warning to Iran, he has desisted from committing to any large scale action

London Stock Exchange may be buying Refinitiv for $27 billion Refinitiv is one of the largest data analytics company in the world and LSE looks to combine with Refinitiv

Globally exchanges are increasingly looking at combining with data analytics providers for value added extension

Vodafone Idea reports quarterly loss of Rs.4873 crore for June quarter The pressure on profits continued after the ARPUs continued to be under pressure for the quarter

Vodafone has already written off losses to the tune of Rs.20,000 crore in the last four quarters

Trump says, China could delay trade deal till 2020 Trump fears that China could actually delay the trade deal till the 2020 elections for maximum political mileage

The trade war between the US and China has led to a slowdown in growth in the US, China and rest off the world

Government may scrap vehicles more than 15 years old The idea is to address the issue of vehicular pollution in the cities through more frequent pollution checks for old cars

However, this could indirectly boost the demand situation for the auto industry as renewal demand could increase

PMO asks the Finance Ministry to rethink on sovereign bonds The PMO has been worried about the currency risk implicit in these sovereign bonds if the dollar appreciates

This risk becomes more pronounced as India was planning a 30-year sovereign bond, which could heighten the risk

IMF must restrict the US from misusing Currency Manipulator tag: Das In the past, the US has accused countries like India and China of deliberately intervening to weaken currency

The Manipulator tag allows the US to take punitive action against nations trying to boost exports this way

Investors lose Rs.150,000 crore of market value during the week The losses were driven by a sharp correction in the financials and auto stocks on worries over rising NPAs

This sharp correction also ensured that the July F&O series turned out to be the worst in last 9 months

India’s Kharif output lags as monsoons remain patchy With a near 35% shortfall in rains in July, the Kharif sowing is surely going to get affected according to agri experts

Weak rainfall, leads to lower farm incomes and higher food grain prices leading to a spike in food inflation

Consumer financing boom may have peaked in India; Chris Wood Chris Wood of CLSA believes that the sweet spot of easy money and low cost of funds is now over in India

This could lead to a weakening of the consumer financing book, that had led a lot of NBFC stocks higher

Maruti and Tata Motors announce weak results for the quarter In the case of Maruti and Tata Motors there was de-growth in sales and also a fall in profits

Auto companies are currently caught between weak demand and rising input costs, which is squeezing margins

Indian auto parts makers to lay off nearly 1 million workers This has been necessitated by the weak auto demand which is stressing out most ancillary manufacturers

The auto ancillary segment currently employs around 5 million hands and this means 20% of the jobs will go

FPIs withdraw $1.75 billion in the first 25 days of July The selling by FPIs became specifically acute after the Union Budget announced revised FPI tax norms

Buyback tax combined with higher FPI tax surcharge have sharply dampened equity sentiments among the FPIs

Zee may be facing a hurdle in getting out if its debt crisis The big challenge for Zee was to repay the debt by September and was counting on the Dish sale to Airtel

However, the deal appears to have run into rough weather due to Airtel having concerns over valuation

ECB chief has committed to let the dovishness continue in policy ECB chief, Mario Draghi, has kept the option of further rate cuts and QE open to tackle economic slump

Former IMF chief, Christine Lagarde will soon be taking over as the chief of ECB from Mario Draghi

Boris Johnson takes over as the new Prime Minister of Britain One of his first challenges will be to complete the BREXIT formalities before October 31st

UK can either just walk out of BREXIT, or insist on a deal or just call for fresh elections in Britain

HDFC and SBI spar over Jet Airways’ BKC property at NCLT SBI has objected to HDFC seeking to keep the BKC property of Jet outside the NCLT process for resolution

HDFC wanted separate treatment for the BKC property as it was specifically mortgaged by Jet for a credit facility

IMF cuts India’s growth rate target by 30 basis points to 7% According to IMF, India was unlikely to grow at above 7% in the next two years due to domestic issues

Apart from the consumption slowdown and the liquidity crunch, IMF has also warned of global headwinds

BSY takes over as the chief minister of Karnataka for the fourth time The BJP emerged as the largest party in Karnataka after nearly 15 MLAs defected from the Congress and the JD(S)

This is the fourth occasion when the Congress despite a majority has managed to lose control of the government

Trump raises a storm with his statement on Kashmir Trump mentioned in an interview that PM Modi had asked him to intervene to resolve the Kashmir problem

However, the Indian External Affairs Ministry has stoutly denied any such request being made by PM Modi



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