Dear Colleagues,
I am pleased to attach the Economy / Market Snapshot covering all the major events in November, 2016.
November was an extraordinary month – the demonetization by the Government of India invalidating Rs.1000 ad Rs.500 denominations and the unexpected victory of Donald Trump as the next President of United States of America. These two events evoked different kind of response in India and US. US markets went up by 5% showing positive signs while the Indian market lost 5% with the FII’s pulling out.
Rs.17,000 crores from the Equity market and Rs.20,000 crores from the debt market – overall Rs.37,000 crores. Indian Rupee came under pressure and almost touched Rs.69 mark but settled at Rs.68.38 at the end of the month. Japan and China markets also went up by 5% while UK markets wend down by 2.50%.
Gold prices came down by 5.64% and so is the case of Silver which came down by 5.76%; Crude remained stable at around $ 50 a barrel.
The Government is having a tough time to face the opposition parties in the Parliament which is getting stalled; The RBI is struggling to boost the money supply across India. Crowd in the banks have come down but the ATM’s are still not functioning (due to lack of money supply) and one can see large queue in ATM’s when money is loaded. The first week pressure on the families to withdraw money for their expenses, the salary payments etc will have to be managed well. While there are various views and opinions to show whether the move is right or wrong, time alone can show how successful is this measure. At this point of time, about INR 8 lakh crores have come into the system against the Rs.14 lakh crore of Rs.1000 and Rs.500 in circulation. December is another critical month for us to see how we move forward on the money front and how the life of the general public comes back to normalcy!
India is leading the test series against England by 2-0 !
Happy reading!
Regards
V Murali
General News
- PM Modi announces the demonetisation of Rs 500 and 1,000 notes; new notes of Rs 2,000 and Rs 500 were circulated from November 10.
- Long queues at banks across country to deposit scrapped notes. Limits on withdrawal, which were later modified, added more chaos.
- Govt eased guidelines for utility payments, farmers, weddings and traders; Most card companies waived off debit card merchant fees.
- RBI limits withdrawal from Jan Dhan accounts to Rs 10,000 a month.
- Demonetised notes to be legal in Nepal only when India issues a notification as per the FEMA.
- Opposition parties protest demonetisation and demanded PM’s presence in the Rajya Sabha.
- Bill to amend Income Tax Act to impose tax on deposits made post demonetisation passed without debate.
- PM Modi visits Japan; 10 pacts in areas such as infrastructure, railways, space and agriculture were signed.
- India and Japan also signed Nuclear energy deal to allow Japan to export nuclear technology to India.
- UK PM May arrived in India; India, Britain sign 2 MoUs on intellectual property rights (IPR) and ease of doing business.
- Fidel Castro, Cuba’s revolutionary icon, died at the age of 90; Cuba observes nine days of mourning.
- FBI gives clean chit to Hillary Clinton just before polls.
- Donald Trump wins the U.S. presidential race, promises to ‘renew the American dream’.
- Donald Trump changes his stand on climate change and prosecuting Hillary Clinton.
- Anti-Trump protests were seen in the New York City; Barack Obama urges nation to forge unity after bitter election.
- UK announces new visa crackdown on non-EU nationals.
- Australia announces changes to the 457 visa programme for skilled foreign workers.
- Canada also announces the immigration levels for 2017.
- Angela Merkel to stand for fourth term as chancellor in 2017.
- National anthem must be played before screening of films: SC.
- By poll results: TMC sweeps West Bengal, AIADMK in Tamil Nadu, BJP takes MP seat.
- Around 150 dead and more than 300 injured after Indore-Patna express train derailed.
- 1,800 schools were shut as Delhi chokes on pollution 12 times worse than safe.
- NGT directs Delhi and 4 neighbouring states to give complete mechanism to curb air pollution.
- SC bans firecrackers in NCR and temporarily the construction activities.
- UP CM Akhilesh Yadav inaugurates Agra-Lucknow expressway, which can double as runway to be used by IAF fighter jets for landing and take-off.
- The one-day ban ordered on NDTV India was widely condemned by journalists and editors.
- Pakistani troops violate ceasefire by shelling border hamlets and posts with mortar bombs.
- Tensions peaked up as a solider was mutilated.
- Pakistan PM Sharif names General Bajwa as new army chief.
- Pakistan suspends import of cotton and other agriculture commodities from India amid tension.
- New water mapping, oil extraction techniques developed by scientists at National Geophysical Research Institute.
- India successfully conducts twin trial of Prithvi-II missile.
- Centre declares 11 November, the birth anniversary of Maulana Abul Kalam Azad, as the National Education Day.
- Airfares to rise as govt imposes levy on airlines to fund flights to small cities.
- UDAN, the regional air connectivity scheme, bidding has seen 20 registrations so far: Government.
- Foreign investors making an investment of Rs 10 crores to be granted permanent residency status.
- The brightest super moon in almost 70 years was witnessed across the globe.
- India vs England: With 1st test drawn, India takes a 2-0 lead in the 5 match series.
- Australia vs South Africa: South Africa won series 2-1.
- Zimbabwe vs Sri Lanka: Sri Lanka won 2 test series 2-0.
- PV Sindhu wins her maiden China Open Super Series title; enters the top 10 of the elite bracket in the latest BWF world ranking.
- Sports federations asked to identify 2020 Olympics medal prospects by end November.
Business News
- GST rate structure finalised, panel fixes rates at 5%, 12%, 18% & 28%.
- Zero-tax rate to apply to 50% of items in the Consumer Price Index basket.
- Luxury cars, tobacco, aerated drinks to be levied with a cess, along with clean energy cess, will be used to compensate States for loss of revenue.
- Rs. 50,000 crore is required to be paid to States for loss of revenue in the first year of GST rollout.
- Indian rupee hits record low of Rs 66.86 against US dollar despite RBI intervention.
- More than Rs 8.44 trillion has been deposited or exchanged at banks till 27 November: RBI.
- NHAI promises to compensate as the developers of national highways are losing Rs 75 crores daily after the demonetisation measures.
- Directorate General of Central Excise Intelligence asks top jewellers in the country to provide stock of their gold post demonetisation.
- Govt asks automobile manufacturers to provide a digital identity tag in all new vehicles to enable e-payment at all toll plazas.
- Paytm bags NHAI deal for automatic toll collection.
- Airtel launches India’s first payments bank, Airtel Payments Bank Ltd in Rajasthan.
- Paytm claims to have registered 700% rise in overall traffic after govt’s demonetization move.
- Fitch retains ‘negative’ outlook for India’s banking sector amid demonetisation move while S&P keeps ratings of Indian financial institutions unchanged at BBB-.
- Tata Sons changes HR head, announces a slew of organizational changes, accuses Mistry of trying to gain control of main firms by using independent directors.
- Tata Trusts get I-T summons to explain the misuse of tax exemption granted for charitable purposes.
- Indian telecom sector got $10 billion FDI in eight months of 2016-17: Telecom Secretary JS Deepak.
- SEBI allows FPIs to invest in unlisted corporate bonds.
- SBI technically writes off bad loans of Rs 7,016 crores including Vijay Mallya’s Rs 1,201 crores.
- Airtel merges its subsidiary, Airtel Bangladesh with Robi Axiata, a unit of Axiata Group Berhad.
- Zydus Cadila CMD Pankaj Patel has been elected president of industry body FICCI for 2017.
- Reliance Capital sells its 49% stake in radio & TV biz to Zee Group for Rs 1900 crores.
- Videocon d2h to merge with Dish TV, create new entity – Dish TV Videocon Ltd.
- Ford to set up of its new R&D centre at a cost of Rs 1300 crores in Chennai.
- Govt imposes anti-dumping duty on imports of steel wire rods from China.
- Heritage Foods signs agreement to purchase dairy business of Reliance Retail.
- Arvind raises Rs 740 crore by diluting stake in fashion arm, Arvind Fashions Ltd.
- Sun Pharma acquires Russian pharma company JSC Biosintez for $60 million.
- European solar company Lightsource enters Indian market with a 50 Mw solar project in Maharashtra under central government’s National Solar Mission.
- Apollo Hospitals forays into medical rehabilitation through joint venture with Italy’s Kos group.
- Amazon starts selling Amul products online in 9 overseas markets from Black Friday, 25th November.
- Kerala’s Malabar Group enters realty business with Rs 10,000 crore commercial, residential projects.
- Moody’s warns of UK downgrade if Brexit deal weakens growth.
- Tata Steel signs deal with Liberty House to sell UK speciality steel biz for 100 million pounds.
Q2 results
- Titan Q2 net profit rises 23.51% to Rs 181 crores.
- ICICI Bank reports 2.4% YoY rise in Q2 net profit at Rs 3,102 crores, provisions increased 7.52% YoY to Rs 7,083 crores.
- Cognizant’s Q3 revenue rise 8.4% to $ 3.45 billion, cuts CY2016 guidance to $ 13.5 billion.
- Godrej Consumer’s Q2 net profit rises 43.66% to Rs318.12 crores.
- Britannia Industries Q2 net profit up 5.79% YoY at Rs 233.95 crores.
- Ashok Leyland Q2 profit up 71% YoY to Rs 294.4 crores.
- Ceat reports 5.5% rise in net profit at Rs 101.82 crores.
- BHEL reports Rs 109 crores profit for Q2; order book stands at Rs 1.03 lakh crores.
- Indian Bank Q2 profit rises 18.5% YoY to Rs 405.1 crores, Provisions for bad loans jumped 249% to Rs 478.3 crores.
- Sun Pharma reports 90% jump in profit after tax at Rs 2,471 crores, revenue up 20.9% to 8,265 crores.
- Bank of India’s Q2 net profit stood at Rs 127 crores, provisions drop 29% YoY.
- SBI reports 34.57% plunge in Q2 net profit at Rs 2,538.32; gross NPAs rise to 7.14% .
- M&M reports a 27% jump in Q2 profit after tax (PAT) at Rs 1,163 crores, combined PAT for M&M and Mahindra Vehicle Manufacturers Ltd is at Rs 1,253 crore, up 29% YoY.
- Ambuja Cements’ Q3 net profit rises 79.2% YoY at Rs 277 crores.
- Polaris Q2 net profit dips by 27.88% at Rs 41.14 crores, CEO Jitin Goyal quits.
- IOB reports a net loss of Rs 765.13 crores for Q2; Net interest income slips 8% YoY to Rs 12.86 crores.
- Bank of Baroda reports 345% jump in Q2 net profit at Rs 552 crores; NPA provisions fall 11.6% to Rs 1,630 crores.
- Tata Motors posts a consolidated net profit of Rs 848 crores in Q2, net revenue was up 6.94% at Rs 67,000 crores.
- Vodafone’s loss after tax soars double to 5.1 billion euros ($5.5 billion) in the 6 months to 30 September compared to previous year.
- L&T Q2 profit jumps 84.3% YoY to Rs 1435 crores, revenue increases 8.2% to Rs 25,011 crores.
Market News
- Indian markets down by 4.5 % while US and Japan went up by 5%
- Auto lost 9% while Pharma, FMCG, Bank lost around 5%; IT was neutral
- FII’s pulled out Rs.37,000 crores from the market both from equity and debt
- Indian Rupee closed at Rs.68.38 against the US Dollar after nearing the Rs.69 mark.
- Gold and Silver dropped by 5.60%
- Crude hovering the $ 50 mark
| WORLD INDICES | |||||
|---|---|---|---|---|---|
| Indices | 30-Oct | 31-Sep | % 1M | 01- Jan | % since Jan |
| BSE | 26,653 | 27,930 | -4.57% | 26,161 | 1.88% |
| NSE | 8,225 | 8,626 | -4.65% | 7,963 | 3.28% |
| DOW | 19,124 | 18,142 | 5.41% | 17,425 | 9.75% |
| NASDAQ | 5,324 | 5,189 | 2.59% | 5,007 | 6.32% |
| FTSE | 6,784 | 6,954 | -2.45% | 6,242 | 8.67% |
| Nikkei | 18,308 | 17,425 | 5.07% | 19,034 | -3.81% |
| Hang Seng | 22,790 | 22,935 | -0.63% | 21,914 | 3.99% |
| Straits Times | 2,904 | 2,814 | 3.20% | 2,883 | 0.74% |
| Shanghai | 3,250 | 3,100 | 4.82% | 3,539 | -8.17% |
| USD | 68.38 | 66.79 | 2.38% | 66.23 | 3.25% |
| Euro | 72.60 | 73.36 | -1.03% | 71.92 | 0.95% |
| GBP | 85.80 | 81.42 | 5.38% | 97.88 | -12.34% |
| Yen/100INR | 0.60 | 0.64 | -6.41% | 0.55 | 8.56% |
| Gold | 28,385 | 30,082 | -5.64% | 26,320 | 7.85% |
| Silver | 40,089 | 42,541 | -5.76% | 33,080 | 21.19% |
| Crude Brent $ | 52.08 | 50.37 | 3.38% | 37.28 | 39.69% |
| Crude Nymex $ | 49.67 | 49.52 | 0.30% | 37.09 | 33.92% |
| NIFTY SECTORAL INDICES | |||||
|---|---|---|---|---|---|
| Sectors | BANK NIFTY | CNX IT | CNX AUTO | CNX FMCG | CNX PHARMA |
| 30-Nov | 18628 | 10088 | 9114 | 20488 | 11080 |
| 31-Oct | 19,524 | 10,083 | 10,049 | 21,482 | 11,636 |
| % 1M | -4.59% | 0.05% | -9.30% | -4.63% | -4.78% |
| 01- Jan | 17039 | 11175 | 8328 | 20185 | 11980 |
| % since Jan | 9.32% | -9.73% | 9.43% | 1.50% | -7.51% |
| INDIAN TRADE( USD MILLION) | |
|---|---|
| Exports | 23513 |
| Imports | 33674 |
| FDI | 4612 |
| Government Bond 10Y | 6.25% |
| GDP YoY | 7.30% |
| Inflation Rate | 4.20% |
| Forex Reserves $ M | 365500 |
| IIP % | 2.40% |
| INSTITUTIONAL TRADING ACTIVITY | ||
|---|---|---|
| Particulars | FII (Rs.crore) | MF (Rs.crore) |
| Equity | -17377 | 13159 |
| Debt | -20046 | 9666 |
| Total 1 M | -37423 | 22825 |
| Total Since Jan | 8292 | 344015 |
| Equity | 23798 | 37749 |
| Debt | -15506 | 306266 |
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