On Friday, June 10, 2022, Fitch Ratings changed India’s outlook from ‘negative’ to stable
In an interesting move, Fitch Ratings raised its outlook for India’s long-term foreign currency ratings from negative to stable. S&P and Moody’s had already pegged India’s ratings at the stable, while only Fitch had held on to its negative outlook for the Indian economy. However, Fitch maintained its rating of BBB- on India. The outlook upgrade by Fitch was on the back of a robust recovery from the COVID-19 pandemic shock. If you leave aside inflation, for the time being, the real driver of growth has been high nominal GDP growth.
Tencent acquires a $264 million stake in Flipkart from co-founder Binny Bansal
Tencent invested $264 million or Rs2,060 crore in Flipkart from its co-founder Binny Bansal. Incidentally, the transaction had been consummated in October 2021 but had been just reported to the government of India. Post the sale, Binny Bansal holds just about 1.84% of Flipkart. Tencent has been an early investor in Flipkart. Now Tencent holds about 0.72% of Flipkart. The Tencentdeal does not fall under the purview of “Press Note 3” since Tencent’s stake is less than 1% in Flipkart. Flipkart was last valued at $37.6 billion.
Indian Steel Association Seeks Govt Help On Coking Coal Prices
The Indian Steel Association (ISA) has sought the intervention of the government to check the prices of coking coal, a key input for steel manufacture. The price of coking coal has surged nearly 3-fold to $450/tonne. Just a year back, the prices were hovering around $120-$130 per tonne. In March this year, the price of coking peaked at $670/tonne amidst tremendous shortages. Currently, India meets 85% of its coking coal via imports, predominantly from Australia. Steel is one of the core infrastructure sectors.
FPIs sold Rs14,000 crore, bringing the total outflows from Indian equities this year to Rs1.81 trillion
For the month of June 2022 till date, FPIs have sold Rs14,000 crore taking the total outflows from Indian equities in the year so far to Rs1.81 trillion. With global uncertainty over the war situation, rate hikes, and commodity inflation, the FPIs have been sustained sellers in the year so far. The hawkishness of the Fed and the RBI has also contributed to the bearishness of the FPIs. Also, with the rates rising in the US, it creates negative interest arbitrage for Indian markets. FPIs are sold in Taiwan and South Korea among EMs.
The market capitalization of India’s ten most valuable companies fell by nearly Rs2.29 trillion
For the week ended 10th June, the market cap of the ten most valuable companies in India by market cap lost nearly Rs2.29 trillion. LIC led the fall in the Big-10. Nifty had fallen 2.63% last week. Among the big losers were Reliance Industries Rs44,311 crore while TCS and Infosys lost Rs45,746 crore between them. The 3 big banks lost Rs34,970.26 crore between them. Another big loser in the week was Hindustan Unilever at Rs21,675 crore. But the biggest loser in the weak was LIC which gave up Rs57,273 crore in market value.