Market Walk

LIC did not have the fairy tale debut that it desired| Market update

LIC did not have the fairy tale debut that it desired

LIC hardly had the fairy tale debut that it was looking for. In fact, on 06th June, the LIC stock hit its lowest level of Rs. 786 as selling continued to plague the stock. Its market cap also fell below the Rs5 trillion mark. Ironically, the other large company that was listed at the same time, Delhivery, has done fairly well in terms of post-listing performance. LIC is now over 17% below its issue price of Rs949. Many of the brokers are starting to initiate buy reports on LIC due to its elevated embedded value, but investors are not too keen.

The benchmark 10-year bond yield rose to a 39-month high of 7.5 per cent on the expectation of a 50 basis point rate hike

The benchmark 10-year bond yield rose to a 39-month high of 7.5% anticipating a 50 basis rate hike in the June policy announcement on 08th June. The spurt in the bond yields came after surveys hinted at RBI also raised its inflation forecast for FY23 by 80 bps to 6.50%. The last time bond yields had traded above 7.5% was in mid-March 2019. Apart from global hawkishness, the Indian rupee has also inched much closer to the 78/$ mark in the last few days, while Brent Crude has crossed above $120/bbl on supply concern

Following Ultratech’s announcement of the expansion, most cement companies extended their losses

Most cement companies extended losses after the announcement of expansion by Ultratech. Cement companies are already caught amidst the rising cost of inputs, power, and freight. In between, the supply glut would only diminish their pricing power further. Among the stocks to touch 52-week lows were Shree Cement, Grasim Industries, Birla Corp, Dalmia Bharat, Ultratech, and JK Cement. Ultratech laid out plans to invest Rs12,886 crore to enhance capacity to 159.25 MTPA, after the mega Adani-ACC-Ambuja deal.

The market watchdog, SEBI, has become much more vigilant and has tightened the screws

With the front-running allegations in the case of Axis Mutual Fund, the market watchdog, SEBI, has been getting a lot more vigilant and tightening the screws. Here it was a case of the dealers having knowledge of trades of the organization and taking front positions ahead of that. Now SEBI wants external monitoring for dealing with activities with concurrent audits. It is also looking at the process flow from order flow to the execution stage in closer detail. One of the tests could be the best price test, but the idea is to tighten norms.

TCS expects staff attrition to fall sharply as demand for its services rises, which is good news for the IT industry

There is good news on the IT front as TCS expects the rate of staff attrition to fall sharply as demand for its services rises. TCS also expects more entry-level tech talent to enter the job market as well as lateral moves from start-ups, which are in the midst of laying off staff. For the Q4FY22, TCS saw staff attrition rise to 17.4%, a hitherto unheard level at TCS. Meanwhile, TCS is also looking to tap the large pool of tech talent in a more organized manner. TCS is also
spending big money on training fresh tech talent in India.

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