Weekly Capsule (Aug 24 – Aug 28)

weekly cap 1 1 Weekly Capsule (Aug 24 – Aug 28)

News Announcement

Impact Analysis

  • Federal Reserve sets a new framework for future interest rates
  • Under the new framework, the Fed will keep rates low even if the erstwhile limits of inflation and jobs were breached
  • Experts believe this almost confirms that the US would keep rates close to zero levels for the next five years
  • Coronavirus cases show little respite in the Indian context
  • Daily cases continue to remain above 70,000 while the overall tally is approaching 35 lakh afflictions in India
  • The recovery rate has sharply improved to 75% but the real worry now is the impact of the next round of unlocking
  • RBI unlikely to extend EMI moratorium beyond 31st August due date
  • Most banks have been asking the Finance Ministry and the RBI to avoid extending the moratorium deadline
  • The moratorium was a deferral and not a waiver of debt and banks are worried that it could lead to NPAs worsening
  • The Rupee strengthens sharply during the week to 73.41/$
  • The strength came largely from the strong FPI flows which has exceeded $6.5 billion in the month of August
  • In addition, the RBI has stopped intervening in the forex market which it does to prevent the rupee strengthening
  • Future Enterprises to consider RIL deal in September 07 board meet
  • RIL has apparently made an offer to Future group to take over all its retail businesses for around Rs.30,000 crore
  • It is reported that the deal will entail merger of all the Future group companies and selling a stake in the single entity
  • Anugrah Stock Broking creates the latest headache for equity markets
  • The broker has reportedly defaulted with Rs.1000 crore outstanding to various client groups
  • The broker had apparently collected huge sums from clients and as of last report, the promoters were not traceable
  • New equity margining system likely to take effect from September 01
  • The new system will entail mandatory pledge and also the onus of margin collection on the broker
  • However, SEBI is expected to meet with brokers and the depositories on 31 August before the final decision
  • Mistry raises key red flags in the latest board meeting of Tata Sons
  • At the AGM, the Mistry family highlighted the huge debt that the group carried in its steel and auto units
  • The Mistry family also raised objections to the massive losses that the group was incurring in the airline ventures
  • Sovereign Gold Bonds Series VI will open for subscription on Aug 31
  • The latest gold bond issue will be priced at Rs.5117/gram, which reflects the market price of Indian gold
  • Indian investors, like most investors in the world, have been rushing to buy gold as investment and as portfolio hedge
  • Bezos enters $200 billion club, Musk enters $100 billion club
  • In the last few months, there has been a huge shift in wealth towards digital and new age technologies
  • The digital franchise has also taken the equity wealth of Mukesh Ambani close to the $100 billion mark
  • Wal-Mart may partner Microsoft in picking a stake in Tik Tok
  • This flurry of bids were necessitated after Trump ordered Tik Tok of China to hive off its US operations on security grounds
  • For Wal-Mart it gives them access to an online market place, a captive young audience and smart advertisement property
  • India’s area under Kharif crop hits an all time high of 108 million hectares
  • This is likely to result in a bumper harvest this year and the outcome could be better control of food inflation
  • The Indian economy has been struggling with high inflation despite negative growth and that can now be arrested
  • Japan’s Shinzo Abe resigns citing serious health concerns
  • Abe was largely responsible for pulling the Japanese economy higher through Abenomics till COVID took its toll
  • For India it would be a loss as Abe had stressed on good trade and business relations with India
  • HAL OFS subscribed over 1.6 times as government retains oversubscription
  • The original issue size was Rs.3350 crore with the leeway to retain oversubscription up to Rs.5020 crore
  • The government has raised the full amount with non-retail investors giving a resounding response to the issue
  • FM asks states to raise funds from the market to bridge the GST gap
  • At the GST Council Meeting, the FM has asked states to use the special window to borrow money with central assurance
  • The dispute arises because the centre had assured states that it would make good the loss for first five years
  • Delhi High Court gives relief to Anil Ambani in insolvency case
  • The High Court rejected the NCLT order to appoint a RP to oversee the liquidation of RCOM
  • This would have entailed personal insolvency of Anil Ambani as he had guaranteed loans taken by RCOM from SBI
  • Supreme Court reserves its judgment on the telecom AGR issue
  • The principal issue of whether telecom dues can be postponed is still under debate in the courts
  • The Supreme Court has added a new twist to the debate by question the status of dues payment by bankrupt telcos
  • Vedanta moves SC on closure of the Tuticorin Copper plant
  • The plant remains shut now for over 2 years since the violence first broke out during protests that led to the death of 15
  • Tuticorin was India’s largest copper smelter and that has created a shortfall leading to mandatory imports
  • NMDC plans to merge its steel business into a separate entity
  • NMDC carries Rs.16,000 crore of WIP in its books which is not reflected in its value
  • This demerging is likely to unlock value for the minority shareholders of NMDC
  • RBI annual report paints a bleak picture of the Indian economy
  • The RBI annual report has hinted at weak GDP growth in the first and the second quarter of fiscal year 2019-20
  • While there was some momentum seen in June and July, a lot of that was sacrificed after fresh restrictions had to be put
  • JSW plans to merge distribution and supply of cement and steel
  • This is likely to give a big boost to the positioning of JSW as a home solutions provider rather than as a materials company
  • The new entity will go under the banner of JSW One and is already operational in Eastern India

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