|News Announcement||Impact Analysis|
|Reliance sells additional stake in Jio Platforms to global PE investors||While 1.15% stake was sold to Silver Lakes, another 2.3% was sold to Vista Equity Partners.|
Both the deals valued Jio Platforms at around $65 billion, a 12% premium to the valuations given by Facebook deal.
|RIL, Infosys and Hindustan Unilever accounted for 50% of Nifty bounce||The sharp bounce in Nifty from the lows of March 23rd was driven by just 3 stocks with most banks still tepid.|
RIL has recovered most of its losses after a series of deals gave hints that RIL could monetize and become zero debt by 2021.
|Franklin Templeton MF issues an apology to SEBI over its remarks||This was after Templeton global CEO, Jennifer Johnson, had remonstrated about SEBI’s rules on unlisted holdings.|
SEBI had pointed out that there was a grandfathering clause and an extended time limit for such a shift.
|April sees fall in equity fund flows and negative flows in credit risk funds||Equity flows were still positive but nearly 47% lower on a MOM basis; largely supported by robust SIPs.|
Credit risk funds saw outflows of Rs.19,300 crore, most of the outflows coming after the Franklin Templeton fiasco.
|Government raises the borrowing limit for the year to Rs.12 trillion||This is a sharp spike from the original budgetary target of Rs.7.8 trillion. Rs. 6 trillion will now be the target for H1.|
This is a clear indication that revenues are likely to be tepid in the fiscal and fiscal deficit could be sharply higher.
|Trump threatens end to trade deal but trade officials move ahead||Trade representatives from the US and China are working overtime on ensuring that the deal does not break.|
Earlier Trump had threatened China that he would call off the deal if China did not honour its $200 billion of US imports.
|Moody’s warns India of a rating downgrade soon||Moody’s had recently lowered the outlook for Indian implying that any upgrades were entirely ruled out for now.|
With the huge impact on growth, as evident from the PMI, and the spiralling fiscal deficit, downgrade looks a possibility.
|May issue of Sovereign Gold Bonds priced at Rs.4590/gram||This is slightly lower than the April tranche that was priced at Rs.4639/gram with rebate for digital investment.|
The SGB Series 2 will open for subscription on May 11 and will close on May 15 and offer a good equity hedge.
|India sees 7.57% growth in pharma exports in fiscal 2019-20||For FY20, the pharma sector achieved record exports of $20.58 billion; slightly short of the $22 billion target.|
Pharma exports are expected to get a further boost in FY21 as the US has substantially relaxed its FDI policy.
|Bond yields are expected to see a sharp spike on higher borrowing targets||With borrowing target raised by more than 50% this year, the rush for government borrowing could spike bond yields.|
This is likely to largely neutralize the impact of the RBI rate cuts and push up the cost of borrowing for corporates.
|Government raising huge monies from RBI via Ways and Means advances||The centre’s WMA from RBI stood at Rs.1.66 trillion compared to just Rs.1.10 trillion in the previous week.|
The WMA of state governments combined has also spiked from Rs.10.63 bn to Rs.38.23 bn in a span of just one week.
|Export contraction in April 2020 could be worse than March numbers||Ministry of Commerce had reported 25% contraction in exports for March and April could be sharper.|
Apart from the lockdown in most sectors, April exports are also likely to be hit by labour and logistical reasons.
|India eyes a major increase in share of the global plastic exports||Currently India’s share of the annual plastics exports of $1 trillion just 1% while China is 10%.|
With Coronavirus undermining China’s credibility, India is ramping up capacities to bridge the gap.
|Moody’s pegs India’s FY21 GDP growth at 0% on COVID-19 lag effect||Moody’s has provided a best case scenario of flat GDP growth assuming growth recovers sharply in Q3 and Q4.|
Moody’s has also retained the negative outlook and warned that India could be downgraded to Junk status.
|US unemployment spikes to 14.7%; the highest since the Great Depression||This is largely on the back of severe job losses on the back of a spate of shutdowns in US businesses.|
The unemployment rate was as low as 4% just one year back and now more than 30 million are availing jobless benefits.
|PFC could be sitting on potential bad loans to the tune of $6.5 billion||This was pointed out by a detailed study of the power sector by an independent research body.|
Nearly 20% of the loans give by PFC and REC to thermal power companies are likely to become bad in the next one year.
|Reliance may look to exit its $1 billion stake in Asian Paints||This was held by RIL as an investment via its group company, Teesta Retail and is nearly 4.9% of APIL capital.|
This is part of RIL’s larger plan to monetize all non-core assets to bring Reliance Group to zero net-debt by March 2021.
|SBI extends loan moratorium to NBFCs by another 3 months||With the moratorium expiring on May 31, it would not really make sense as the lockdown is likely to extend longer.|
With SBI taking the lead, other banks are expected to follow, giving the much needed respite for NBFCs.
|PMI manufacturing and PMI Services for April crash to all-time lows||For the month of April, PMI Manufacturing fell vertically to 27.2 while PMI Services fell sharply to 5.4 levels.|
This is clearly indicative of an economy at standstill with most sectors shut or operating at 50% capacity utilization.
|Banks may trying hard to find a buyer for the assets of Future Group||The group is already deep in debt and has been making consecutive defaults on its debt repayments.|
Rising interest costs, steep rentals and zero footfalls have brought that Future group to the virtual brink.
|MSME sector in India may be staring at 10 crore job losses in the near future||MSMEs account for 25% of GDP output and nearly 40% of the total exports going out of India.|
MSMEs have been asking for direct transfers for payment of wages and salaries; but government has not responded.