Daily Market Highlights JUN 03

morning main Daily Market Highlights JUN 03

Previous Day Market

Sensex closed at 51,849 down by 85 points
Nifty closed at 15,576 up by 1 point

The 3-day MPC meet began on Wednesday, which will culminate in the monetary policy announcement on Friday 04 June. The broad consensus estimate is that RBI will maintain the status quo on rates and also on the accommodative stance due to the imperatives of COVID 2.0. Retail inflation has also eased closer to the RBI long-term median target of 4%. RBI Annual Report underlined that the central bank’s bias would be to remain supportive of economic growth. The IMD has already predicted normal monsoons this year.

According to early estimates by the Ministry of Commerce, merchandise exports were up 67% in May-21 at $32.21 billion. Merchandise imports for May-21 were relatively lower at $38.53 billion, resulting in the merchandise trade deficit coming in at an 8-month low level of $6.32 billion. There was a boost in exports of cereals, iron ore, cotton yarn, handloom products, jute, rice, and ceramics. Exports of leather, tea, oilseeds, and jewelry saw a dip. The trade deficit was at $15.1 billion in Apr-21, due to curbs on gold imports.

Infosys, one of the pioneers of corporate governance practices in India, corrected on Wednesday after two of its employees were barred from the securities market by SEBI for indulging in insider trading. It pertained to the use of unpublished price-sensitive information or UPSI to profit via trading. In addition, to these 2 employees, 6 other entities were also barred by SEBI in this case. Infosys will initiate an internal investigation into the insider trading matter. This does raise questions of ethics among Infy employees.

Muthoot Finance, India’s largest gold loan company, plans to raise Rs.5,000 crore via bonds. Despite the COVID 2.0 pressures, Muthoot reported a 22% growth in net profits at Rs996cr in the Mar-21 quarter. This was largely driven by a 16% spurt in Net interest income or NII to Rs.1,830 crore in Q4. Gold loans have seen a spurt in demand due to their ability to bridge short-term liquidity gaps. Loan assets grew 26% YoY to Rs.52,622 crore as of Mar-21 end. Muthoot will raise funds to expand its loan book in current conditions.

In the aftermath of BREXIT, India and the UK are intensifying talks to remove non-tariff barriers in order to move towards a major free-trade pact over the next 8-10 years. The Modi government had decided to pull out of a multilateral Asia trade pact in 2019 and that allows them greater leeway to sign deals with the EU and UK separately. To begin with, India may allow British medical devices and agri-products into India while the UK will give access to Indian seafarers and nurses. India and UK are major trade partners.

Motherson Sumi stock rallied by 11% and hit a 52-week high after it posted a robust performance in the Mar-21 quarter. Net profits were up 290% at Rs.714 crore on the back of strong operating performance by its global subsidiaries, which account for over 90% of its total revenues. Revenues were up 19% at Rs.17,844 crore even as EBITDA margins expanded 190 bps to 11.2% in Q4. IT has been facing challenges like a shortage of semiconductors and high commodity costs. MSSL is India’s largest auto ancillary company.

Urban Company, the owner of the famous Urban Clap brand offering online home services, has raised $255 million from Prosus Ventures, Dragoneer, and Wellington. The start-up is now valued at $2.1 billion. Urban Company has aggressive plans to expand to 100 Indian cities and also create a footprint in global markets. Urban Company had been one of the major beneficiaries of the pandemic which confined people to their homes. It has seen a boom in-home services like repairs, cleaning, painting, disinfection, and grooming.

Franklin Templeton MF confirmed that the 6 shuttered debt schemes had distributed Rs.14,572 crore to its investors till the end of May-21. That is 58% of the NAV value as of Apr-20 and it had Rs.2,642 crore is available for distribution. FT MF had shut 6 debt schemes in Apr-20 as it could not handle redemption pressures. The SOP to monetize assets and distribute proceeds to unitholders of the six debt schemes of FT MF is designed and being executed by SBI MF under Supreme Court order. Haircuts could be huge.

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