Weekly Capsule (Dec 07 – Dec 11)

weekly blog Weekly Capsule (Dec 07 – Dec 11)

News Announcement

Impact Analysis

  • IIP growth for Oct-20 comes in sharply higher at 3.63%
  • This is a further improvement over the positive growth in Sep-20 and reverses 6 months of negative IIP growth
  • The positive bounce in the IIP was driven by manufacturing sector, which has a weight of 77.6% in the IIP basket
  • Farmers plan to move the Supreme Court as no solution in sight
  • The farmers are calling for a total withdrawal of the Farm Bills which the government is not willing to do at this point
  • The farmers have expressed apprehension that the new Bill might favour large corporates and eventually kill the MSP
  • Boris Johnson warns Britons that deal talks could fail over next 3 weeks
  • Johnson has been trying to prepare his people over a non-deal BREXT with the EU, something on which he had been voted
  • The due date expires soon and it remains to be seen if the EU and UK agree to extend the timeline further
  • Sensex closes above 46,000, Nifty above the 13,500 mark
  • It was another bullish week for the stock markets as FPI flows almost continued unabated in a sea of liquidity
  • The Nifty and Sensex are now up nearly 78% since the lows made on 24 March 2020 on hopes of economic recovery
  • Wheat sowing sharply higher by 2.53% over the previous year
  • This shows that we could have another year of record wheat output, even as Rabi got a boost from full reservoirs
  • This year, the increased sowing area coverage has also been true for pulses and oilseeds, as per Agriculture Ministry
  • Canara Bank raises Rs.2000 crore by issuing 19 crore shares via QIP
  • The issue which opened on 07 December and closed on 10 December saw LIC at 25% as the biggest investor in the QIP
  • Other significant investors in the QIP included BNP Paribas Arbitrage, Nippon Life, Societe Generale and Kuber India Fund
  • Domestic air traffic sees 19% growth in Nov-20 on sequential basis
  • The domestic air traffic touched 6.2 million in Nov-20, though it is still half of the traffic achieved in Nov-19
  • However, capacity utilization in Nov-20 stood at 59% against just 52% recorded in the month of October 2020.
  • Tatas reject proportionate group shares allotment proposal by Mistry
  • This comes after the valuation gap of $13 billion emerged between the stake valuations by Tatas and Mistry family
  • Clearly, any simple solution looks to be elusive and the legal battle might drag on for much longer from here on
  • Banks disclose sanctioning Rs.2.05 trillion to SMEs under emergency line
  • More than 81 lakh MSMEs have till date benefited from the special Rs.300,000 crore credit guarantee scheme for SMEs
  • These loans come with a 5 year tenor to ease the situation for SMEs and also offer 12 month moratorium on repayment
  • Embassy Parks REITS to raise Rs.8,000 crore via sale of units to investors
  • This sale of units will be done to institutional investors to fund the acquisition of Embassy Tech Village near Bengaluru
  • The Embassy Tech Village entails an investment of Rs.9782 crore and it can also borrow up to 35% of gross asset value
  • Government prunes its stake in IRCTC by another 20% after successful OFS
  • The government decided to exercise its green shoe option after the institutional portion was subscribed 1.34 times
  • On Friday, the shares were offered to retail investors and that portion got fully absorbed bring government stake to 67.4%
  • Blackstone Fund all set to buy Piramal Glass for a sum of $1 billion
  • The fund is also negotiating with banks for a $400 million loan and the deal is expected to be announced next week
  • This is part of Piramal Group’s larger plan to sell down its non-core business to support its core financing business
  • Passenger vehicles wholesale numbers rise 4.65% in November 2020
  • According to SIAM, the rapid growth in sales was largely driven by festive sales during the month of November
  • Despatches to dealers touched 264,898 units and even dealers confirmed similar growth on MOM basis
  • Brent Crude prices swept past $50/bbl during the week after almost 9 months
  • The rally has been very sharp in the last 2 months after vaccine progress hinted at a rapid global economic recovery
  • Oil prices also got a boost after the OPEC decided to sustain its supply cuts almost at similar levels to hold prices
  • UPL crashes by 12% after whistleblower alleges money laundering
  • The management has clarified that the allegations on rental agreements pertained to the 2017 period
  • Jaidev Shroff also clarified that the Audit Committee had investigated the matter and had found nothing amiss
  • Snowman Logistics stock rallies nearly 96% in a span of 5 weeks
  • The rally in Snowman started after it became clear that refrigerated storage would be the key to vaccine movement
  • Snowman has recently tied up with Spice Jet and Om Logistics to distribute COVID vaccines on an all-India basis
  • NSE to launch derivative contracts on Nifty Financial Services Index
  • This index trades will be the much needed expansion beyond Nifty and Bank Nifty and will trade from 11 January 2020
  • Traders will get a more representative index comprising banks, insurance companies, NBFCs and HFCs.
  • TCS buyback program worth Rs.16,000 crore to commence on 16 December
  • The program will entail a buyback of 5.33 crore shares at a maximum price of Rs.3,000 per share
  • TCS has already fixed 28 November as the record date for shareholders to be eligible for the buyback
  • RBI moves in to tighten regulation on systematically important NBFCs
  • One of the major area of regulation was that dividend payouts will be automatically restricted in tough years
  • In addition, RBI has also prescribed stringent norms for capital adequacy and for asset classification like the banks
  • Supreme Court asks SEBI to appoint observer for Templeton MF e-vote
  • SC has instructed that the results of the vote with the report of observer be presented in court in a sealed cover
  • This pertains to the permission sought by Templeton MF to wind up six of its debt funds which had tanked in value
  • Mutual fund flows hint at outflows of Rs.12,800 crore from equity funds
  • However, the overall Mutual Fund AUM touched a life-time high of Rs.30 trillion on the back of the Nifty rally
  • While debt funds continued to see inflows, the SIPs fell to a 2-year low of Rs.7302 crore in November 2020

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