Weekly Capsule (Dec 14 – Dec 18)

weekly blog 1 Weekly Capsule (Dec 14 – Dec 18)

News AnnouncementImpact Analysis
  • CPI Inflation for November 2020 comes in sharply lower at 6.93%
  • Inflation trended lower from 7.61% in October on the back of lower food prices in November on strong Kharif output
  • However, the CPI inflation remains well above the RBI outer comfort zone of 6%
  • MPC minutes hinted at continuation of low rates and accommodative policy
  • All the MPC members were of the view that the primary focus must still be on growth recovery
  • Jayanth Varma insisted that while stance should be easy, the MPC must avoid giving guarantees on policy stance
  • Moderna becomes the second COVID vaccine to get USFDA approval
  • Earlier, the Pfizer – BionTech vaccine had received USFDA approval under emergency use authorization
  • This will start the next big global challenge of distributing and making the vaccines available to the last mile person
  • Reliance and British Petroleum to start gas output from ultra-deep water
  • This is the first of the three gas wells developed in the KG-D6 basin to go fully on stream off Kakinada Coast
  • In India, the government ordained pricing is a lot more attractive for deep-sea and difficult-to-drill gas finds
  • Sensex scaled all-time peak of 47,000 during the week ended 18 December
  • The big push to the markets came from FPIs who have now infused more than Rs.100,000 crore in 33 trading sessions
  • The recent rally was led by banks and financials but IT and Pharma now appear to be taking part in sector rotation
  • PNB QIP issue falls short of the fund raising target by 46%
  • PNB had planned to raise Rs.7,000 crore but could get QIB interest for less than Rs.3,500 crore
  • PNB needs to raise funds to shore up its capital adequacy ratio and also to create a war chest to expand its assets further
  • India pushes for inclusion of Indian bonds in global bond indices
  • This is normally predicated on the pace of bond market reforms taken up by the government
  • This inclusion is critical if India has to attract passive bond flows from FPIs, the way China has been attracting
  • Tatas may be one of the bidders for a controlling stake in Air India
  • The other known bidder, apart from the Tatas, is a consortium of investors led by employees of Air India
  • For Tatas, the merger will give them a clear 23% market share, still much smaller than the 55% share of Indigo
  • Domestic air passenger traffic in Nov-20 falls by 51% on a YOY basis
  • The DGCA announced that domestic airlines moved 63.54 lakh passengers during the month of November 2020
  • With Mumbai flights still subject to restrictions, Indian aviation companies had to operate below 70% load factor
  • Defence Ministry to farm out orders worth Rs.28,000 crore in next 2 years
  • More than 95% of these orders will be farmed out to Indian defence companies as part of Atma Nirbhar program
  • This includes AWACS for the IAF, patrol boats for the Indian Navy and modular bridges for the Indian Army
  • Burger King IPO lists at premium but shows no signs of relenting
  • Burger King listed 100% higher but it then hit upper circuit for 3 days in succession gaining over 250% in 3 days of listing
  • Burger King is the second largest player in the burger market after McDonalds and is a key player in the QSR segment
  • Bectors Foods IPO gets oversubscribed 199 times as of close last week
  • The oversubscription was driven by a 620X demand from the HNI segment, largely driven by IPO funding route
  • Bectors manufactures and sells biscuits and bakery products and counts Burger King among its key customers
  • Brent Crude crossed the $51.5/bbl mark during the week
  • On the demand side, the Brent prices gained form a rapid recovery from COVID and a fall in inventories
  • On the supply side, the sustained OPEC supply cuts is likely to keep the oil markets under-supplied during the year
  • Indian government to facilitate $60 billion investments in gas
  • The core purpose will include investing in gas pipelines, LNG infrastructure and city gas distribution or CGD
  • The while idea is that the share of gas in India’s energy mix increases from 6% currently to 15% by the year 2030
  • Anil Agarwal readies $10 billion war chest for PSU acquisitions
  • Anil Agarwal sees value in Indian PSUs and is looking at BPCL stake after acquiring BALCO and HZL in the past
  • Agarwal has been focusing on buying BPCL to provide a forward integration to the oil wells owned by Cairn unit
  • Majesco declares Rs.974 per share dividend on its shares
  • The irony is that the current market price of the stock is around Rs.966, so the stock could turn negative post-dividend
  • For investors, booking profits would be more tax efficient as capital gains entail lower taxes compared to dividends
  • The US puts India on the watch-list as possible currency manipulator
  • The US had recently declared Switzerland and Vietnam as currency manipulators, although both have denied charges
  • In addition, India, Thailand and Taiwan have also been put on the watch list as they run large trade surpluses with the US
  • SEBI to permit digital Fintech players into the Asset Management business
  • The ideas is that players like Paytm and Phone Pe can leverage their digital customers to sell mutual funds
  • SEBI may have to be cautious about allowing companies with no asset management track record in the AMC business
  • Government plans to give sugar subsidy of Rs.3600 crore to boost exports
  • Export subsidies have become necessary due to the glut of sugar inventories and also because Indian prices are higher
  • In the past, sugar producers like Brazil and Thailand have objected to this technique of sidetracking the WTO rules
  • Hero Moto plans to raise its vehicle prices by maximum of Rs.1500
  • The price hike was necessitated after inputs costs of manufacturing an automobile had gone up sharply
  • Other than Hero Moto, auto manufacturers like Bajaj Auto, Maruti Suzuki and M&M are also hiking product prices
  • Mistry family calls for NCLT approval of Tata Sons converting to private
  • The Mistry counsel, Ariyama Sundaram, argued that the Tata action was against the spirit of the Companies Act 2013
  • The settlement of the Mistry stake in Tata Sons is still stuck over differences in valuation of the stake

Related Post

Add a Comment

Your email address will not be published.