Weekly Capsule (Oct 26 – Oct 30)

weekly cap 1 Weekly Capsule (Oct 26 – Oct 30)

News Announcement

Impact Analysis

  • The digital mix comes of age in the latest Reliance Industries results
  • Even as Reliance profits were lower, the pressure came more from refining than from the emerging businesses
  • While Refining still accounted for close to 40% of revenues, it was digital that accounted for 40% of the EBITDA
  • Vodafone reports loss of Rs7,218 crore, hints at tariff hike
  • The losses for Vodafone were much lower this quarter on the back of reduced provisioning, but ARPUs remain low
  • The CEO has indicated that Vodafone may take the lead in hiking tariffs to bring their ARPUs to more sustainable levels
  • Amazon intimates SEBI and exchanges about contents of Singapore order
  • The Singapore arbitrator had ordered a stay on the RIL-Future group merger deal on grounds of rights of first refusal
  • Amazon had contended that as an existing stakeholder in FEL via Future Coupons, they were not given that right
  • Reliance Jio trebles Q2 profits to Rs.2,844 crore on customer expansion
  • The growth in profits were driven by a 33% growth in telecom and digital revenues on a comparable yoy basis
  • Jio added 7.3 million customers to become the first telecom company outside China to cross 400 million customers
  • IndusInd net profit drops 53% to Rs.663 crore for the Sep-20 quarter
  • The fall in profit was largely on account of a substantial increase in provisions to Rs.1,964 crore in Sep-20 quarter
  • These provisions pertained to likely loan losses and also to COVID related provisions in their books
  • Indian Oil Corporation reports a sharp spurt in gross refining margins (GRM)
  • The GRM of IOCL spurted on a yoy basis from $1.28 to $8.62 leading to a 15-fold increase in net profits
  • This profit boost was also supported by positive inventory valuation of oil stocks as well as forex gains
  • CBDT extends the last date for filing tax returns for FY 2019-20
  • The last date for filing returns has been further extended by a month from November 30 till December 31
  • The original deadline was July 31, but could not be completed due to COVID related delays
  • Gold ETFs log Rs.2400 crore of inflows in the Sep-20 quarter
  • This has taken the total gold ETF inflows in the year to date to about Rs.6000 crore as equity fund flows wane
  • Many investors are looking at gold ETFs as a strategic return class as well as a hedge against overall portfolio volatility
  • Axis Bank agrees to buy up to 19% stake in Max Life
  • This came after the RBI rejected Axis Bank’s proposal to purchase 17% stake in Max Life
  • This stake will be jointly purchased by Axis Bank, Axis Capital and Axis Securities
  • Nifty closes the week at 11,642, way below the 12,000 resistance levels
  • The sharp fall in the Nifty was driven by heavyweights like TCS and Reliance seeing profit booking by traders
  • However, there has been no concerted selling by FPIs seen and the MSCI revamp could actually boost flows into India
  • Exxon Mobile likely to lay off 1900 employees in the US
  • These job losses are most likely to come from the Houston, Texas offices of Exxon Mobil
  • Like other integrated oil companies, Exxon has also been under tremendous pressure due to weak oil prices
  • Joe Biden leads Donald Trump in pre-election opinion polls
  • If Biden wins, Trump would be the first president after George Bush Sr. in 1992 to not get a second term
  • Ahead of the elections on November 03, the polls have predicted a significant edge for Biden across all states
  • Finance Ministry instructs banks to complete interest credit by Nov 05
  • This pertains to the Rs.7500 crore of compound interest charged by banks on loan limits up to Rs.2 crore
  • Banks will now have to credit the amount back to the accounts of such borrowers by Nov 05 and claim refund
  • Kuwait Investment Authority buys 0.53% in Angel Broking
  • Angel Broking had just completed its IPO earlier this month and had seen a disappointing listing on the bourses
  • However, the company reported stellar numbers for the Sep-20 quarter and that has changed sentiments around the stock
  • Listed brokers perform much better than expected in Sep-20 quarter
  • There is a trend of positive growth in listed brokers like IIFL Securities, ICICI Sec, Motilal Oswal and Angel Broking
  • Profits in the Sep-20 quarter were largely driven by an aggressive expansion in client base in the midst of COVID
  • Pallonji Mistry asks for proportionate stake in Tata Group companies
  • In a surprising move, Tata group stocks slumped on Friday after Mistry suggested pro-rata split of listed stocks
  • That would mean that if Tata Sons owned 70% in TCS, then Mistry family gets 12.6% in TCS proportionate to their 18%
  • India hits 115% of full year fiscal deficit target in the first six months
  • Against a full year fiscal deficit target of Rs.7.91 trillion, India had breached Rs.9.15 trillion by the end of Sep-20
  • That would mean that India may end up with an overall central fiscal deficit of close to 7% of GDP
  • Government plans slew of measures to push through sale of Air India
  • Apart from pushing back the bid submission date till Dec 14, bidders have also been allowed bid on EV rather than equity
  • However, interested bidders would have to deposit 15% of the bid sum upfront as earnest money
  • ETFs pull out close to $11 billion from India funds
  • This included $8 billion in India dedicated funds and another $2.8 billion in GEM funds
  • ETFs are normally passive index investors but tend to exert a heavy influence on the market direction
  • Tata Group may pick up a majority stake in Big Basket
  • This will give the Tata Group an online platform to compete with the likes of Amazon and Reliance in that space
  • The Tatas are already working on a plan to monetize their digital properties and Big Basket would fit in perfectly
  • Aditya Puri retires from HDFC Bank after 26 years at the helm
  • Puri leaves the bank with a market capitalization of $80 billion and gross NPAs of just about 1.3%
  • His successor, Sasidhar Jagadishan will have the onerous task of sustaining and managing the growth in the coming years

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