Daily Market Update – Dec 08 2020

unnamed Daily Market Update   Dec 08 2020

Scores of farmers protesting against the Farm Bill have called for a nation-wide strike on 08 December. Most of the political parties like the INC, AAP, NCP, BSP, SP, DMK and the left parties have come out openly in support of the farmers call for a nation-wide Bandh on 08 December. The first five rounds of talks between the government and the farmers have been futile with both the parties refusing to budge on the subject of private sale of produce by farmers and assurance of MSP. The biggest protests have come from the farmers of Punjab and Haryana where the Rabi sowing season is currently in progress.

The NSE has officially launched weekly futures contract on 3 pairs of currencies. These weekly contracts will be offered in EUR-INR, GBP-INR and JPY-INR contracts to begin with. The weekly options in equity indices like the Nifty and Bank Nifty have been extremely successful as shorter options and lower premiums have been a magnet for option buyers and option sellers. The weekly options will also permit the traders to hedge their short term risk, which is a lot more relevant in the case of currencies where short term fluctuations have an overt influence. The exchange will also use this opportunity to build volumes in these three contracts in the same way as the USD-INR contracts, which continue to dominate the currency futures markets. This is expected to reduce the advantage of the OTC currency markets.

Indian companies have raised Rs.73,215 crore from the capital markets in the month of October; predominantly through the debt private placement route. This is marginally lower than Sep-20. Out of this total amount, Rs.62,331 crore was accounted by privately placed debt while Rs.4,144 crore was accounted for by privately placed equity. The public issues in October raised Rs.5,825 crore through the equity route via 6 main-board offerings. These six issues included UTI, Angel, CAMS, Chemcon, Likhita and Mazagon Docks. An additional Rs.550 crore during the month was raised through rights issues.

Franklin has warned that if the unit holders spurned the plan to wind up the six beleaguered funds, then it could result in huge losses on the $4 billion locked up in the six funds. The Supreme Court has asked Franklin Templeton to seek unit holder approval before winding up the fund. The electronic voting will take place between December 26 and December 28 and a simple majority will be sufficient. However, the reality is that even if the winding up is approved, the unit holders will have to be prepared for a fairly large haircut on their investments. Clearly, the fund had some really bad and illiquid investments.

Kotak Mahindra AMC has announced the launch of the Kotak International REIT fund of funds (FOF). It will have a diversified portfolio of listed REITs investing in the realty projects in the residential, commercial, warehousing and hospitality segments. The NFO for this FOF has opened on December 07 and will close on December 21. While the Indian REIT market is just about taking off, the FOF will invest in the Asia Pacific market which has always been a high-growth market for REITs. The fund will invest in the SMAM Asia REIT Sub Trust Fund. The APAC region is likely to be the fastest in realty demand growth.

Even as the Pfizer / BionTech vaccine candidate has been received emergency approval in the UK and is close to getting emergency authorization in India too, there are more pressing and practical problems that Pfizer will be under. Its India partner, Serum Institute, has already applied to the Indian government for an emergency authorization that will allow them to market the vaccine candidate with greater speed. However, Pfizer is worried that the vaccine requires -70 degrees temperature and that level of cooling on a commercially viable basis is just not available in India. Refrigeration of vaccines assumes a lot more importance in the Indian context due to the vast distances and poor infrastructure. On the pricing front, Pfizer has clarified it would depend on the quantities ordered and commitments given.

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