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Posted on 27-Sep-2019 Comments  0

Weekly Capsule (Sep 23 – Sep 27) and Impact Analysis

News Announcement Impact Analysis

Foreign investors may be eyeing the Rs.11 trillion NPA pile in India According to Deloitte, foreign investors see big potential in acquiring these bad loans at a steep discount from banks

It hits two birds with one stone. It offers high risk investors a new assets class and also lightens bank balance sheets

RBI puts a freeze on all inflows and outflows of PMC Bank of Mumbai The cooperative bank will now only permit withdrawal of Rs.10,000 from the account for next 6 months

RBI was forced to announce this freeze on the bank after it was found that HDIL accounted for 31% of all its loans

Saudi Aramco restores production 5 days ahead of schedule Aramco had cut its output from 11.2 million bpd to 6.1 million bpd after the drone attacks by the Houthi rebels

With full output restored earlier than scheduled, Aramco supply managed to bring crude prices down by $11/bbl

Trump plans to delist all Chinese companies from the US This decision was taken even as the US also decided to limit the US investments in China

This was seen as a measure to browbeat China after the Chinese delegation had walked out of trade talks last week

Modi calls on world community to join hands to fight terrorism Taking a dig at countries like Pakistan, Modi underlined that the lack of unanimity was delaying the fight against terror

Talking about Kashmir at the UN General Assembly, Modi assured that human rights had been upheld in India

Tata Motors to shut JLR plants in the UK for a full week This plant shutdown is intended to help the demand and supply get back in sync with each other

Carmakers globally have been struggling with weak Chinese demand and the price of Tata Motors cracked in response

CBDT extends deadline for tax filing and audit by one month In line with demands, the government agreed to extend the deadline for audited filing of returns till October 31st

These typically apply to Form 6 submissions for business profits wherein the software update was as late as September

Acropetal Technologies gets pulled up by SEBI for diversion of IPO funds The MD of Acropetal has been barred from accessing the capital markets for the next 10 years for funds diversion

In addition, six senior officials of the company have also been barred from the capital markets for up to 3 years

Reliance Capital completes the sale of RNAM stake to Nippon Life Post the stake sale, Nippon Life now holds 75% stake in RNAM and the name change is likely to reflect the new ownership

Nippon Life has already invested close to Rs.7600 crore into RNAM and underlines its long term interest in India

Altico seeks more time to repay a sum of $610 million to creditors After the default by Altico in the previous week, many more lenders to the company had called back their loans

Altico, backed by Clearwater, has sought more time to repay in the light of the liquidity crunch in its business

Yes Bank touches a 52-week low during the last week of September The stock has fallen nearly 80% from its peak price and shows no signs of settling down after the new CEO took over

The bank has heavily written off its bad assets but still has a 38% exposure to corporate stress cases

Nirmala Sitharaman dismisses concerns over liquidity in the banking system This statement was made by the finance minister after her elaborate meeting with private banks in India

The FM also underlined that funding would be made available to NBFCs which do not have solvency issues

Ashok Tyagi cautions mutual funds against standstill arrangements The SEBI chief has underlined that standstill agreements do not have any provision in the SEBI MF regulations

Under the new regulations, MFs are required to treat any such standstill agreements as a default and provide for the same

No fiscal slippage likely assures the finance minister Talking about the Rs.145,000 crore payout, the FM clarified that talks of fiscal deficit going up to 3.97% were unfounded

Government has other choices like cutting expenditure or looking for other sources of revenues to bridge this gap

Sugar exports continue to struggle despite export subsidies offered Indian government has been trying to compensate sugar mills by giving them export subsidies due to higher cost

However, despite the subsidies, Indian exports are unable to compete due to lower international prices

SEBI proposes tighter bond disclosure requirements to rating agencies SEBI has mandated that any material default related data must be shared with rating agencies immediately

In the past, RBI has been wary of sharing such data due to client confidentiality issues, but that may have to change

Indian funds find it hard to beat the index consistently; Morningstar The difficulty of outperformance has become a lot more acute in the last years according to Morningstar

Experts believe that this trend could lead to the rise of passive funds in the Indian context

Coal India worker’s strike hits coal output significantly Coal output for the month of September was down by nearly 56% as workers protested 100% FDI in private coal mining

This strike is badly hitting the Indian thermal power sector and threatens to make its huge debt stressed

SEBI notifies two new regulations for foreign portfolio investors The first shift pertains to the KYC requirements for FPIs, which has been substantially simplified

Secondly, FPIs have also been permitted to seamlessly transfer shares by off-market transfers via demat

Mutual funds sitting heavily on cash to the tune of more than 10% of AUM That would imply that most of the equity funds would have missed out on the rally in the Nifty in last 1 week

Despite the sharp rally, the extreme volatility has kept the mutual funds in the zone of uncertainty

UK Supreme Court strikes down suspension of parliament The decision of the Boris Johnson to prorogue parliament ahead of BREXIT is no longer valid

This also signifies that the entire BREXIT process may have to go through debate and may need another extension



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