Weekly Capsule (Jun 08 – Jun 12) and Impact Analysis

weekly cap 1 1 Weekly Capsule (Jun 08 – Jun 12) and Impact Analysis

News AnnouncementImpact Analysis
April IIP contracts by 55% even as inflation announcement is suspendedThe 55% contraction in IIP was not surprising due to the sharp fall in manufacturing to the extent of more than 65%
While the government suspended inflation announcement during the lockdown, food inflation was to 9.3% in May
Reliance rights shares to be listed under new ISIN from Monday, 15 JuneThe partly paid shares will be traded at approximately one-fourth value as only 25% of the money has been collected
Due to the slew of deals struck by Reliance in the last 8 weeks, the RIL-PP shares are likely to trade at a premium
M&M sets in motion plans to exit loss making international businessesM&M reported Rs.3255 crore net loss in the Mar-20 quarter as it wrote off its investments in Ssangyong of Korea
Considering the tight capital market conditions, M&M has chosen not to pursue global ventures that guzzle capital
Templeton has approached Supreme Court to vacate stay on e-votingThis was in response to the Gujarat High Court imposing a stay on e-voting on the subject of liquidation of six funds
This stay was based on a petition filed by three investors in Gujarat after FT summarily opted to wind up six debt funds
SC gives RBI and Finance Ministry 3 days to decided on EMI moratoriumThis is with reference to a PIL in the SC that the moratorium on EMIs should be replaced by an interest waiver
RBI had then explained that waiver would be credit negative as it would entail a cost in terms of the write-off
Donald Trump warns that he would put a ban on H1-B visasThis is likely to hit Indian IT companies that rely heavily on H1-B visas to send Indian software engineers abroad
US companies have also protested that such a move could have a negative impact on the timelines of their projects
The US Fed warns of steep contraction in growth and jobs in 2020The Fed warning of a 6.5% contraction in GDP growth hit global stock market sentiments badly on Thursday
In addition, the Fed also warned of unemployment touching a high of 9.5%, making the Fed hold 0% rates till 2022
Supreme Court upholds AGR order, pulls up DOT on PSU interpretationBharti and Vodafone will have to eventually pay up overdue AGR, but it will be a bigger burden for Vodafone Idea
PSUs like GAIL, Power Grid and Oil India will be exempt from the penal AGR charges; being non-telecom companies
SBI to drag Anil Ambani to NCLT over Rs.1200 crore personal guaranteeThis pertains to a loan of Rs.1200 crore given to Reliance Communication for with Anil was a personal guarantor
This is the second such case, with the personal guarantee case with Chinese banks going on in a London court
India’s forex reserves cross $500 billion for the first timeWith strong remittance flows and limited RBI intervention required, Indian forex reserves are in the top-5 now
This is a comfortable situation as the reserves are enough to cover more than 14 months of average imports
IDFC First Bank raises Rs.2,000 crore via preferential allotment of sharesThis share placement was necessitated to create a war chest in the light of COVID-19 uncertainty in the markets
The bank managed to place shares with marquee names like HDFC Life, Bajaj Allianz and Dayside Investments
Indian COVID-19 cases cross 300,000 and casualties approach 9000The pace has picked up in the last few weeks with India now having the fourth most number of afflictions in the world
Already it is feared that if the numbers worsen, then state government s may withdraw Unlock 1.0
Eicher Motors reports halving of profits amid the shutdownProfits at Eicher Motors fell by 44% to Rs.303 crore in Mar-20 quarter even as sales fell by 11.7% to Rs.2208 crore
With most dealerships shuttered post February, the company lost out heavily on the traditional year-end demand
SIP investments fall to Rs.8123 crore for the month of May 2020According to data published by AMFI, the average SIP inflow was around Rs.500 crore lower in May 2020
However, MF insiders contend that the actual figure could be much lower if adjusted for the SIP bounces in May
MCX gets SEBI OK for futures on bullion and base metals indicesThese index futures will be mandatorily cash settled and no delivery of commodities will be available
The negative oil price fiasco of April 20 underlined the need for bourses to offer index products for small traders
Banks are preparing themselves for a spike in gold loan demandBanks seen an opportunity and a way out as lending to business on old metrics gets increasingly tough
Banks are offering added facilities like higher LTV, partial waiver of processing fees, liberal payment terms etc
S&P holds India’s ratings on the edge of Investment GradeThere was no change in the S&P rating, keeping India’s sovereign rating just above speculative grade
Unlike Moody’s, the good thing was that S&P has maintained India’s outlook as stable and not as negative
Indian mobile phone exports could touch $100 billion by 2025Currently, there are only two countries that are net exporters of mobile handsets globally viz. China and Vietnam
With the pandemic fears in China, companies are looking at alternatives like India to manufacture electronic products
Refinery throughput for Indian refiners up by 80% in the month of May 2020IOCL has reported that the demand for petrol and diesel had literally doubled in May as the lockdown was being eased
This also led to refinery utilization levels more than doubling from 39% to a more profitable level of 80%
PFC in talks with bankers to launch $570 million bond issuePFC is the largest lender to the power sector and had raised $2 billion via the global bond route last fiscal year
PFC had virtually become a monopolistic power financer after it took over REC last year for a sum of Rs.14,500 crore
Government takes one more step to make life simpler for start-upsStart-ups will now be allowed to issue sweat equity to employees up to 10 years from incorporation
MCA has also set aside the need to create a reserve for debenture payments; especially for private placements

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