Weekly Capsule (Sep 14 – Sep 18) and Impact Analysis

weekly cap 1 1 Weekly Capsule (Sep 14 – Sep 18) and Impact Analysis

News Announcement

Impact Analysis

  • August CPI inflation comes in slightly lower at 6.69% on lower food prices
  • This fall in inflation was matched by a lowering of the revised estimate for July inflation from 6.93% to 6.73%
  • While food inflation came under some control, the big worry remains the core inflation now scaling up closer to 5.8%
  • August indicates further widening of merchandise trade deficit to $6.77 bn
  • While exports stagnated, imports were higher triggered by higher gold imports in August
  • The net surplus after considering the services trade was just about $0.13 billion for the month of August
  • Mistry family demands compensation from Tatas for blocking share pledge
  • Tata Sons had approached the SC to block the pledge of Tata Sons shares as it was tantamount to a sale of shares
  • Now, the Mistry family has sought compensation on the grounds that this could put them at severe financial risk
  • China likely to have the last word in the Oracle / Bytedance deal
  • The Chinese government decision to retain final word on any global transfer of software IP, gives little choice to Tik Tok
  • Tik Tok would look at a US domicile in partnership with Oracle but Trump may not be willing to accept such an arrangement
  • Angel Broking has announced its Rs.600 crore IPO to open next week
  • Angel is making the most of this trend of a sharp surge in demat account openings with CDSL and NSDL
  • The Angel IPO will be partially fresh issue and partially offer for sale where IFC will offload its shares in the IPO
  • Happiest Minds gets a stellar listing on the stock exchange at 111% premium
  • The likely premium on listing was evident in the way the issue got oversubscribed by nearly 151 times
  • Markets have been willing to pay a premium for stocks that are in more futuristic industries with revenue visibility
  • Adani Green crosses Rs.1 lakh crore in market cap during the week
  • This makes the company the most valuable Adani group company and, interestingly, more valuable than ONGC
  • Adani Green has projected installed capacity of 25GW of solar power, making it the largest facility in the world
  • FOMC meet hints that there will be no rate hikes for next 3 years
  • Fed confirmed that even if inflation was to go above 2%, the Fed would wait for the growth impulses to return
  • The Fed expects growth to pick up from 2021 onwards but for now the focus will be on the forthcoming US elections
  • Reddy Labs stock zooms on the bourses to touch a life time high
  • A big trigger for Reddy Labs was the exclusive deal to manufacture and sell COVID vaccines produced by Russia
  • On Friday, when the markets were weak overall, the pharma index was up 3%, with most pharma stocks hitting yearly highs
  • Paytm briefly removed from Google Store, but makes a quick comeback
  • On 18 September, Paytm was briefly moved out of the Google Store for allowing prohibited gambling deals on the platform
  • However, Paytm was brought back after they clarified that the IPL online game was only about using skill for cash-backs
  • Indian markets look to raise Rs.50,000 crore from IPOs in FY21
  • This would be led by some big names that are yet to hit the market including UTI MF. This does not include LIC IPO
  • The record IPO collections was in FY17 when the markets managed to collect Rs.75,000 crore via IPOs
  • Indian companies borrow Rs.4 trillion locally due to low costs
  • Corporate AAA bond spreads are at their lowest in history, making debt very attractive to the issuers
  • With yields low, there is a lot of demand for such debt paper as companies look to build post-COVID shields
  • Vedanta asks SEBI to approve its delisting cum buyback plan
  • Promoter has a war chest of $3.2 billion and with that money it can afford to pay a maximum price of Rs.125 for Vedanta
  • The delisting will only be possible if 90% of the outstanding 49% shares are tendered for buyback in reverse building
  • SC rejects SBI plea to initiate personal bankruptcy against Anil Ambani
  • This pertains to loans taken by RCOM from SBI, which had the personal guarantee of Anil Ambani
  • Most banks were awaiting the outcome of the SC order as it would set a precedent for more such cases
  • Piramal Group to sell a majority stake in group company, Piramal Glass
  • Piramal Glass, formerly Gujarat Glass, is one of the assets that PEL is looking to monetize to reduce the group debt
  • Blackstone and the Partners group are in the fray and are reported to be at an advanced stage of negotiations
  • Tencent may look to take a stake in ecommerce giant, Flipkart
  • Tencent had been looking at Flipkart for some time as it is based out of Singapore and can avoid Indian restrictions
  • Tencent and Ant Financials have been among the two most prolific investors in the Indian start-up scene
  • Serum Institute resumes its trials for the vaccine in India
  • Serum Institute had been instructed by DCGI to stop further testing till Astra Zeneca got approval in UK
  • With that being out of the way, the DCGI has permitted Serum to again start testing, subject to stringent checks and balances
  • Global rating giants and development banks project India GDP at -10% in FY21
  • The double digit contraction in FY21 was confirmed by names like Fitch, Moody’s S&P, ADB and even the RBI
  • These agencies have blamed the limited fiscal room as well as the resurgence of COVID cases as reasons for the sharp fall
  • CAMS IPO to hit the market next week to raise Rs.1600 crore
  • The CAMS issue will be entirely an OFS so there will be no fresh funds coming into the company
  • CAMS is the largest MF registrar in India with a 72% market share and it could make the best of troubles at Karvy
  • Divi’s to focus on making intermediates for the manufacture of Remdesivir
  • Divi sees a much bigger opportunity in these inputs as that can hedge India’s pharma industry from Chinese supply chains
  • Broadly, Divi will focus on making hyrdo-chloroquine and Favipiravir plus inputs for Remdesivir
  • Multi-cap rules unlikely to be a game changer for smaller companies
  • Most mutual funds are likely to be more calibrated about any forced shift from large caps to mid and small caps
  • While mid caps and small caps have done well, it looks more like speculation rather than a fundamental shift

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