Weekly Capsule (Dec 28 – Jan 01)

weekly blog Weekly Capsule (Dec 28 – Jan 01)

News Announcement

Impact Analysis

·GST Collections for December 2020 touches all-time high of Rs.1.15 trillion·This is the highest monthly collection ever and is in sync with the rapid recovery in output of goods and services

·This represents a 12% growth on a YOY basis and a growth of 9.7% on a sequential basis

·Core sector growth slips to -2.6% for the month of November 2020·The positive growth in sectors like fertilizers, electricity and coal tapered to lower levels in the month

·However, the good news was that the crude oil output and refinery products contracted much less at -4.5% in Nov-20

·Passenger vehicles see good traction in demand in December 2020·While Maruti reported 14.6% growth in sales, Hyundai reported much higher growth of 25% for December

·However, demand for commercial vehicles remained muted even as tractor demand continued to be robust

·Reliance Jio announces free local calls to all networks from 01-January·This was announced after the interconnect usage charges or IUC was scrapped by TRAI effective from 01-Jan 2021

·This move is likely to be positive for Vodafone Idea but would be largely neutral as far as Bharti Airtel is concerned

·Nifty closes on Friday above the psychological 14,000 mark·This is the first time in the history of markets that the Nifty has given a close above 14,000 levels

·The Sensex closed just shy of 48,000 and the markets have received a big boost from relentless FPI flows

·Antony Waste Handling IPO lists at 38% premium to issue price·The IPO listed on 01-Jan at Rs.436 against the issue price of Rs.315,  and touched an intraday high of Rs.489

·However, towards the end of the day, the profit booking pulled the stock below the listing price and closed at Rs.409

·Agriculture Minister to meet farmers on 04 Jan for resolution of demands·While the government is open to talks, it has ruled out scrapping of the three Farm Bills passed in parliament

·The farmers on the other hand, are adamant on scrapping the 3 bills and government assurance on MSP

·Bajaj Auto becomes first 2-wheeler company to cross Rs.1 trillion MCAP·Having lost the early-mover advantage in motorcycles to Hero Honda, Bajaj has achieved a sharp focus on motorcycles

·Its big focus on the international market has made its business model less vulnerable to domestic cycles

·Government postpones tax filing deadline by 10 days for individuals·In fact, all deadlines have been pushed back by 15 days to a month, despite the massive filings already received

·The chartered accountants had been demanding more time to file returns due to COVID-related disruptions

·Astra-Zeneca vaccine approved in UK, may get India approval too·Compared to Pfizer-Biontech vaccine, the Astra vaccine got delayed due to issues related to phase-3 clinical testing

·In India, Serum Institute of Pune will be manufacturing and marketing these vaccines on behalf of Astra Zeneca

·Short sellers are estimated to have lost nearly $38 billion on Tesla in 2020·Tesla, founded by Elon Musk, has been through one of the longest and relentless rallies during the year

·The rally was so sharp that Elon Musk emerged as the second richest individual with a portfolio value of $167 billion

·Domino’s Pizza franchiser, Jubilant Foods, invests in Barbecue Nation·This is a strategic expansion for Jubilant Foods in the highly lucrative QSR segment; where a diversified portfolio matters

·Jubilant invested Rs.92 crore to pick up a 10.76% strategic stake in Barbecue National Hospitality Ltd.

·Fiscal deficit touches 135% of full year target of Rs.8 trillion, as of Nov-20·It is not just the fiscal deficit but even the revenue deficit touched 140% of the target by the end of November 2020

·The rise in fiscal deficit is driven less by higher spending and more by shortfall in revenues from tax and non-tax sources

·India saw a 21% rise in FDI flows for Apr-Oct period at $35.33 billion·The FDI figure would have been higher at $46.82 billion if the earnings reinvestment were also taken into account

·Of course, nearly a third of that FDI came from the two Reliance Jio FDI deals with Facebook and Google

·Farmers agitation estimated to cost nearly Rs.70,000 crore of lost business·The agitation has deeply impacted the movement of agri and industrial goods between Punjab, Haryana and Delhi

·In Punjab and Haryana, the big impact is on the MSME sector which contributes nearly 30% of the GSDP

·Demand for office space in 2020 fell by 55% to just 27.4 million SFT·Bengaluru led with 6.8 million SFT and Hyderabad with 5.4 million SFT, accounting for 45% of all absorption in 2020

·The demand for office space has been hit most in the mid-rung companies as WFH takes off in a big way in India

·Air Asia plans to sell 32.67% in India JV to Tata Sons for $37.2 million·This is in line with the broad plan of Air Asia Malaysia to focus only in Southeast Asia and exit India and Japan totally

·Tatas have also bid for Air India and combined with Vistaara and the 82% stake in Air Asia could be a significant player

·Resolution professional confirms RCOM total dues at Rs.26,000 crore·Creditors including banks, other lenders and operational creditors had put up claims against RCOM of Rs.86,000 crore

·It remains to be seen, how much of this outstanding amount can be recovered by monetizing the assets of RCOM

·Equity markets collected a record Rs.177,500 crore in year 2020·This includes funds raised via IPOs, FPOs, OFS, QIP placements and REITS / INVITs related issues

·QIPs were the largest contributor this year followed by REITS / INVITS and then by equity IPOs

·Replacement demand fires up tyre industry in the midst of the pandemic·The replacement demand already accounts for 58% of the tyre market with OEM accounting for balance 42%

·Post the pandemic, the OEM tyre sales fell by 16.3% but the replacement tyre demand was down only 2.6%

·Indian steel output for Nov-20 grows at 3.5%; lower than world growth at 6.6%·India is already the second largest producer of steel in the world after China, although China has 52% market share

·For Nov-20, China and Europe saw steel output growing while the US and Japan saw steel output tapering

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