Aditya Birla Capital Q2 FY26: Lending Momentum Accelerates, but Profit Expansion Stays Mild

Commodities, Currency, Equities, Markets - May 26, 2020

Market Update 26th May 2020. Pharma and IT stocks decline.

Market Update 26th May 2020. Pharma and IT stocks decline.

Overall performance:

Today, Indian indices ended on low note, dragged by IT and Pharma sector stocks. While market closed, SENSEX was down by 63.29 points or 0.21%, closing at 30,609.30 and NIFTY was down by 10.20 points or 0.11%, closing at 9,029.05. The S&P BSE midcap index was up by 136.56 points or 1.21%, closing at 11,406.58 and S&P BSE Small cap increased by 66.19 points or 0.63%, closing at 10,590.42. NIFTY Midcap 100 closed at 12,835.65, up by 167.60 points or 1.32%, closing at 12,835.65 and NIFTY Small cap 100 closed at 3,880.20, up by 29.35 points or 0.76%.

Global indices and commodiies:

When Indian market closed, DAX was trading at 11,462.39 up by 71.11 points or 0.62%. NASDAQ was trading at 9,324.59 up by 39.71 points or 0.43%. CAC was trading at 4,594.76, up by 1.21% or 54.85 points. While, SGX Nifty was down by 60.50 points or 0.67% and trading at 9,021.50. Currently, Gold is trading at 46,760 down by 218 points and 0.46%, Silver is trading at 48,525 up by 268 points and 0.56% and Crude oil is trading at 2,582 which is up by 5.00 points or by 0.19%.

Currency:

At the closing time of Indian indices, almost all the currencies were trading at a higher note except USD. USD was trading at Rs 75.66, down by 0.38% or 0.29 points. EURO was trading at Rs 82.91, up by 0.17% or 0.14 points and GBP was trading at Rs 93.09, up by 0.76% or 0.71 points.

Sector:

Today, almost all other sectors ended on higher note, expect for the energy, IT and healthcare sector. The S&P BSE Auto index increased by 210.00 points or by 1.61%, closing at 13,280.10 and S&P BSE Metal gained 175.86 points or 2.84%. While, S&P BSE Health care fell by 100.26 points and BSE IT fell by 294.31 points. At closing, NIFTY BANK increased by 161.45 points or 0.93%, closed at 17,440.35 and NIFTY Auto increased by 87.30 points, closing at 5,854.30. While, NIFTY IT and Pharma fell by 267.70 points and 117.15 points respectively.

Top 5 gainers:

Share price of Eicher Motors increased by 882.70 points or 6.34%, closing at Rs 14,805.10. JSW Steel gained 10.10 points or 6.08% and closed at Rs 176.25. Titan company’s shares increased by 43.10 points or 5.07%, closing at Rs 892.75. Share price of Ultra tech cement increased by 147.05 points or 4.04%, closing at Rs 3786.00 and Shree cements was up by 757.05 points or 3.80% and closed at Rs 20667.30.

Top 5 losers:

Today, Bharti Airtel declined by 33.95 points or 5.72%, closing at Rs 559.25. Bajaj finance which is decreasing from last few days, today declined by 3.50% or 66.30 points, closing at Rs 1829.00. Bajaj Finserv decreased by 218.30 points or by 5.06%, closing at Rs 4097.25. Share price of TCS fell by 77.35 points or 3.83%, closing at Rs 1,943. Sun Pharma declined by 10.25 points or 2.18%, closing at Rs 459.15 and Cipla decreased by 11.65 points or 1.82%, closing at Rs 627.70.

Stock in news:

Most active stock by volume were stocks such as Vodafone Idea, Bharti Airtel, IDFC First Bank, Jindal Steel, ITC, Adani power, Tata power and SBI. Eicher Motors was in news as share price of the company increased by 882.70 points and closed at Rs 14,805.10. Also, shares of Ruchi Soya locked in 5% lower circuit today due to the profit bookings and closed at Rs 547.15, down by 28.75 points. Avenue super marts was also in news as they posted 41.6% YoY increase in their consolidated profit, closing at Rs 2,283.25.

Weekly market update (18th May – 22th May).

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Krishna Institute reported a net profit of Rs. 79 Cr.

Commodities, Currency, Equities, Market News, Markets - May 24, 2020

Weekly market update (18th May - 22th May).

Weekly market update (18th May – 22th May).

Overall performance:

Fluctuation was seen in market due to many reasons such as resurgence trade tensions between China and US, rate cut by RBI and disappointing reaction for stimulus packages. On 18th May, SENSEX opened at 31,097.73 and closed at 30,028.98 (down by 1,068.75) while, on Friday market closed at 30,672.59 down by 425.14 points or 1.367 percent compared to opening price on Monday. On the other hand, NIFTY touched low at 8,800 during mid-week.

On Monday, NIFTY opened at 9,136.85 and closed at 9,039.25 on Friday lower by 97.6 points or 1.06 percent. However, the S&P BSE small-cap index increased by 10% to 30%. Around 30 stocks increased in small cap which includes Zen Technologies, Alok industries, Sintex Industries, Prozone Intu Properties Ltd and India cements. While, NIFTYBANK declined by more than 8%.

Global indices, currencies and commodities:

DAX was trading at 10,749.56, up by 287.16 points or 2.74%, on Monday while today it is trading at 11,073.87 up by 7.94 points and NASDAQ was trading at 9,014.56 up by 70.84 points or 0.79% while now it is trading at 9,324.59, up by 39.71. CAC was trading at 4,366.26, up by 2.07% or 88.63 points, now trading at 4,444.56, down by 0.89 points.

When market closed on Monday, Gold was trading at 47,858 up by 489 points and is now trading at 47,056. Silver was trading at 48,552 and is currently trading at 48,338, up by 1,003 points. On Monday, at the time of closing of Indian indices, USD was trading at Rs 75.91 which is now trading at Rs 75.95. EURO was trading at Rs 82.20, currently trading at Rs 82.79 and GBP was trading at Rs 92.19 which is now trading at Rs 92.58.

Sector wise update:

On Friday, NIFTY BANK decreased by 456.20 points or 2.57%, closing at 17,278.90 which was trading around 18,529 on Monday. While other sectors like Pharma and Auto sectors increased around 2%-5%.

Top 5 gainers:

This week, share price of ITC increased by 13.18% or by 21.70 points, closing at Rs 186.35, Cipla gained 69.05 points or by 12.11%, closing at Rs 639.3. Shares of Mahindra and Mahindra jumped by 11.81 percent or 45.05 points, closing at Rs 426.35. Bharti Airtel’s share price increased by 39.10 points or 7.06 percent, closing at Rs 593.20 this week, and share price of TCS gained 127.45 points or 11 percent this week and closed at Rs 2,020.35.

Top 5 losers:

Mahindra & Mahindra Financial Services share price fell by 6.31 percent or by 8.60 points and closed at Rs 127.60. This week, share price of Shriram Transport Finance decreased by 5.78 percent or 33.20 points, closing at Rs 541.40. Axis Bank fell by 5.65 % or 20.20 points, closing at Rs 337.10. Ashok Leyland shares declined by 5.42 percent or 2.50 points, closing at Rs 43.60 and share price of Power Finance Corp declined by 5.31% or 4.20 points and closed at Rs 74.90 on Friday.

Which stocks were in news?

This week, various companies were scheduled to announce their March quarter earnings. This is includes companies such as D-mart (Avenue Supermart), JSW steel, DCB Bank, Alembic Pharma, Bosch, Colgate, Bayer cropscein, UPL, Birla Corp, IDFC first Bank, JSW steel, Bajaj Auto, Cipla and Bharti Airtel. Among these companies, many posted loss for Q4 FY20 which affected their shares. Many stocks from Pharma and Auto sector were also in news as share prices of auto companies such as M&M and Hero MotoCorp increased by 2% to 6%. While, Pharma companies stocks such as Cipla and Dr Reddys labs increased by 4%-10%.

Most active stock by volume were Vodafone Idea, SBI, HUL and Maruti Suzuki, Reliance Power, Axis bank, Yes bank, Tata Power, India Bulls and Bharat Electronics. On Friday, around 31 stocks touched their 52 week low which includes Bajaj Finance, Chennai Petroleum Corporation, SBI, ABB, India Bulls, Cyient, The Karnataka Bank and Power Finance Corporation. IRCTC was in news as bookings for passenger trains started and their shares are increasing and again locked in 5% upper circuit (for 2nd time). On Friday their shares gained 22.70 points, closing at Rs 1,422.70.

Airport Authority of India provides new air travel guidelines.

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Devyani International Q1 FY26 Results: Revenue Growth Amid Profit Challenges

Commodities, Currency, Equities, Market News, Markets - May 22, 2020

Market update 22nd May 2020. Financials dip after RBI's announcement.

Market update 22nd May 2020. Financials dip after RBI’s announcement.

Overall performance:

Indian indices ended on low note today, mostly dragged by banking and financial sector stocks. When market closed, SENSEX was down by 260.31 points or 0.84%, closing at 30,672.59 and NIFTY was down by 67 points or 0.74%, closing at 9,039.25. While, the S&P BSE midcap index was down by 93.82 points or 0.83%, closing at 11,270.02. S&P BSE Small cap decreased by 23.90 points or 0.23%, closing at 10,524.23. NIFTY Midcap 100 closed at 12,668.05, down by 94.60 points or 0.74%, closing at 12,668.05 and NIFTY Small cap 100 closed at 3,850.85, down by 24.35 points or 0.63%.

Global indices and commodities:

When Indian market closed, DAX was trading at 11,016.77 down by 49.16 points or 0.44%. NASDAQ was trading at 9,284.88 down by 90.90 points or 0.97% and CAC was trading at 4,435.93, down by 0.21% or 9.52 points. While, SGX Nifty was down by 45.50 points or 0.50% and trading at 9,035.50. Currently, Gold is trading at 46,965 up by 577 points and 1.24%. Silver is trading at 47,719 up by 415 points and 0.88%. Crude oil is trading at 2,424 which is declined by 139 points and 5.42%.

Currency:

At the closing time of Indian indices, USD was trading at Rs 75.95, up by 0.34%. EURO was trading at Rs 82.69, down by 0.11% and GBP was trading at Rs 92.32, down by 0.10%.

Sector:

Among the sectors, IT, Auto, Pharma and media sector ended on high note but banking and financial sector ended on low note. The S&P BSE Auto index increased by 48.79 points while, S&P BSE Energy declined by 18.29 points or 0.41%,.BSE BANKEX fell by 497.17 points or 2.44%. At closing, NIFTY BANK decreased by 456.20 points or 2.57%, closing at 17,278.90 while, NIFTY IT increased by 194.75 points or 1.43%, closing at 13,842.65.

Top 5 gainers:

Today, share price of Zee Entertainment increased by 9.30 points or 6.04%, closing at Rs 163.25. Mahindra & Mahindra which is increasing from the last few days, gained 18.05 points or 4.42% and closed at Rs 426.35. Shares of Cipla increased by 22.75 points or 3.69%, closing at Rs 639.35. Shree Cements increased by 659.10 points or 3.42%, closing at Rs 19,910.25 and Infosys was up by 20.15 points or 3% and closed at Rs 692.35.

Top 5 losers:

Today, shares which declined the most were from the banking or finance sector. Axis bank declined by 20.25 points or 5.67%, closing at Rs 336.95. HDFC shares declined by 5.08% or 81.15 points, closing at Rs 1,516.15. Bajaj Finserv decreased by 223.65 points or by 4.93%, closing at Rs 4,315.55. Share price of Bajaj finance fell by 94.90 points or 4.77%, closing at Rs 1,895.30 and ICICI Bank declined by 13.35 points or 4.39%, closing at Rs 291.05.

Stock in news:

Shares of Pharma and Auto sectors ended on high note. IRCTC was in news after booking for passenger trains started their shares are increasing. Today it increased by 22.70 points, closing at Rs 1422.70. Today, around 31 stocks touched their 52 week low which includes Bajaj Finance, Chennai Petroleum Corporation, SBI, ABB, India bulls, Cyient, The Karnataka Bank and Power Finance Corporation.

Zee entertainment was in news as share price of the company increased by 6.04 percent and closed at Rs 163.25. Also, Mahindra & Mahindra gained 4.42%, closing at Rs 426.35 . Other than these stocks, most active stocks in terms of volume were Vodafone idea, SBI, ICICI Bank, BHEL, Bank of Baroda, Axis Bank and IDFC First Bank in terms of volume.

Airport Authority of India provides new air travel guidelines.

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Aarti Industries Ltd Q1 FY23 Result Updates.

Commodities, Currency, Equities, Market News, Markets - May 21, 2020

Market update 21st May 2020. ITC record biggest one-day gain in nearly 2 months.

Market update 21st May 2020. ITC record biggest one-day gain in nearly 2 months.

Overall performance:

Indian indices ended on high note. While market closed, SENSEX was up by 114.29 points or 0.37%, closing at 30,932.90 and NIFTY was up by 39.70 points or 0.44%, closing at 9,106.25. While, the S&P BSE midcap index was up by 85.62 points or 0.76%, closing at 11,363.84 and S&P BSE Small cap increased by 75.76 points or 0.72%, closing at 10,548.13 NIFTY Midcap 100 closed at 12,762.65, up by 98.45 points or 0.78% and NIFTY Small cap 100 closed at 3,875.20, up by 23.45 points or 0.61%.

Global indices and commodities:

When Indian market closed, DAX was trading at 11,067.85 down by 155.86 points or 1.39%. NASDAQ was trading at 9,375.78 up by 190.68 points or 2.08% and CAC was trading at 4,452.40, down by 0.99% or 44.58 points. While, SGX Nifty was down by 18.50 points or 0.20% and trading at 9,064.50. Currently, Gold is trading at 46,692 down by 451 points and 0.96%. Silver is trading at 48,101 down by 957 points and 1.95%. Crude oil is trading at 2,604 which is up by 84 points and 3.33%.

Currency:

At the closing time of Indian indices, almost all the currencies were trading at a lower note. USD was trading at Rs 75.60, down by 0.25%. EURO was trading at Rs 82.84, down by 0.11% and GBP was trading at Rs 92.38, down by 0.10%.

Sector:

Today, almost all other sectors ended on higher note, expect for the banking sector. The S&P BSE Auto index increased by 311.34 points or by 2.45% and S&P BSE Energy gained 22.61 points or 0.51% while BSE CDGS increased by 2.09%. At closing, NIFTY BANK decreased by 105.10 points or 0.59%, closing at 17,735.10 and NIFTY IT and AUTO increased by 130.55 points and 146.10 points respectively.

Top 5 gainers:

Share price of ITC increased by 13.20 points or 7.51%, closing at Rs 188.95. Hindalco gained 129.50 points or 7.20% and closed at Rs 129.50. Asian paints increased by 74.25 points or 4.95%, closing at Rs 1,574.30. Hero MotoCorp increased by 95.90 points or 4.74%, closing at Rs 2,119.50 and Maruti Suzuki was up by 158.15 points or 3.23% and closed at Rs 5,050.10.

Top 5 losers:

Bajaj Finserv declined by 162.85 points or 3.46%, closing at Rs 4,539.20. IndusInd bank which is declining from the last few days, declined by 2.94% or 10.50 points, closing at Rs 346.80. NTPC decreased by 2.65 points or by 2.85%, closing at Rs 90.25. Share price of Bajaj Finance fell by 52.60 points or 2.57%, closing at Rs 1,990.20 and Adani ports declined by 6.60 points or 2.04%, closing at Rs 317.15.

Stock in news:

Hero MotoCorp was in news as share price of the company increased by 95.90 points and closed at Rs 2,119.50. Also, IRCTC locked in upper circuit at 5% for the second day, closing at Rs 1,400 after bookings for passenger train started. Other than these stocks, most active stocks were Vodafone idea, SBI, ITC, Bank of Baroda, ICICI Bank and Alok Leyland in terms of volume.

Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

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Avenue Supermarts Shares Jump 4% as New Store Openings Boost Growth Prospects

Commodities, Currency, Equities, Market News, Markets - May 20, 2020

Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

Overall performance:

Today, for the second consecutive day Indian indices ended on a high note. As market closed, SENSEX was up by 622.44 points or 2.06%, closing at 30,818.61 and NIFTY was up by 187.45 points or 2.11%, closing at 9,066.55 While, the S&P BSE midcap index was up by 166.09 points or 1.49%, closing at 11,278.22 and S&P BSE Small cap increased by 117.19 points or 1.13%, closing at 10,472.37. NIFTY Midcap 100 closed at 12,664.20, up by 193.50 points or 1.55% and NIFTY Small cap 100 closed at 3,851.75, up by 39.80 points or 1.04%.

Global indices and commodities:

When Indian market closed, DAX was trading at 11,136.49 up by 61.20 points or 0.55%, NASDAQ was trading at 9,185.10 down by 49.73 points or 0.54% and CAC was trading at 4,452.75, down by 0.12% or 5.41 points. While, SGX Nifty was up by 259 points or 2.94% and trading at 9,083.00. Currently, Gold is trading at 47,203 up by 153 points and 0.33%, Silver is trading at 49,045 up by 227 points and 0.46%. Crude oil is trading at 2,442 which is up by 40 points and 1.67%.

Currency:

At the time of closing of Indian indices, USD was trading at Rs 75.79, up by 0.21%. EURO was trading at Rs 82.80, up by 0.22% and GBP was trading at Rs 92.79, up by 0.13%.

Sector:

Today, almost all other sectors ended on a high note. The S&P BSE Auto index rose by 258.63 points and S&P BSE Energy rose by 84.07 points or 1.93%. At closing, NIFTY BANK increased by 353.95 points or 2.02%, closing at 17,840.20 while, NIFTY IT increased by 70.80 points or 0.53%.

Top 5 gainers:

Share price of Shree Cements increased by 1,070.90 points or 5.84%, closing at Rs 19,411.65. Mahindra & Mahindra gained 22.15 points or 5.78% and closed at Rs 405.05. Shares of Dr Reddys Labs increased by 210.60 points or 5.69%, closing at Rs 3,910.20. HDFC gained 87.15 points or 5.66%, closing at Rs 1,627 and Eicher Motors was up by 708.90 points or 5.47% and closed at Rs 13,675.10.

Top 5 losers:

Today, Bharti Infratel declined by 17.90 points or 8.18%, closing at Rs 200.85. Vedanta, which is decreasing from last 2 days, declined by 1.61% or 1.45 points, closing at Rs 88.55, IndusInd bank decreased by 10.50 points or by 2.85%, closing at Rs 357.30. Share price of Hero MotoCorp fell by 49.90 points or 2.41%, closing at Rs 2,023.60 and Bharti Airtel declined by 4.75 points or 0.79%, closing at Rs 594.05.

Stock in news:

Today, shares of Pharma, banking and Auto sectors ended on higher note. Shree cements was in news as share price of the company increased by 1,070.90 points and closed at Rs 19,411.65. Bharti Infratel was also in news as today their share price decreased more than 8%, closing at Rs 200.85 and Mahindra and Mahindra shares which was declining since last few days, today gained 22.15 points. Other than these stocks, most active stocks were Vodafone idea, SBI, Tata powers, ICICI Bank, BHEL and Alok Industries in terms of volume.

FPIs exit markets after economic package announcement.

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Business, Market News, Markets - May 19, 2020

BSE, NSE cut listing fees for SMEs

BSE, NSE cut listing fees for SMEs

Due to COVID-19 pandemic, all the sectors have been affected badly but SMEs segments are affected the most. Therefore, during the announcements of details of Rs 20 lakh crore stimulus package, Finance minister Nirmala Sitharaman made special announcements related to MSMEs.

Reduction in listing fees:

Now to support SMEs and MSMEs, Indian stock exchanges BSE and NSE came forward. They have relaxed listing norms and reduced listing fee for small and medium enterprises by 25%. However, this norms are applicable to both existing and new firms which are looking forward to list on BSE SME platform and NSE SME platform.

What are the Current charges?

Currently for SMEs, Rs 25,000 or 0.1 percent of market capitalization of firm is the listing fee charged by BSE. The NSE charges around Rs 10,000 to Rs 45,000, depending on the SME firms market capitalization. Until now, BSE has 322 small and medium companies listed and has raised around Rs 3,278.84 crore from the market. Their market capitalisation is of Rs 15,865.39 crore so far. On the other side, so far only 209 small and medium companies are listed on NSE and have raised over Rs 3,200 crore.

What measures have been announced by government?

Due to the covid-19 lock down, many industries are facing problems like job losses and are cash strapped. During this situation, the main concern for MSMEs is that they are not able to restart their operations due to supply issues and non-availability of labour. Last week, while making announcement for packages in tranches, government changed the definition for MSMEs and linked it to the turnover limits of the companies so that their businesses grow with benefits. They announced measures for MSMEs and Rs 3 lakh crore package for collateral free automatic loans with separate funds for equity support.

However, these Rs 3 lakh crore will also be useful for existing borrowers who have over Rs 100 crore turnover and Rs 25 crore outstanding. Fresh loans can be taken by companies up to 20% of their outstanding. These loans have tenure of 4 years, with moratorium repayment period of 12 months. However, the government will also give them credit guarantee of 100 percent which will cover interest and principal to banking and non-banking institutions. Government will give around Rs 4,000 crore funds to Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE) with partial credit guarantee to banks. However for expansion of MSMEs, the government will provide corpus of Rs 10,000 crore so that they can also list after expansion.

Further Expectations:

Micro, small and medium enterprises (MSMEs) are very cautious while taking any kind of fresh loans, as they are not sure about the demands for their products after all activity resumes. Most of the micro, small and medium businesses and enterprises are expecting from the government, to give them direct relief by waiving their electricity bills and other fixed expenditure such as payment of salaries. However, banks have already reduced their loans such as credit limit. Anil Bhardwaj, Secretary general of federation of Indian micro, small & medium enterprises (FISME) said, for all the small business and enterprises, government will take care of their fixed expenses. MSME industry has three major demand, interest payments, easy access to loans and payments of salaries from the government, during this situation due to COVID-19 lock down.

FPIs exit markets after economic package announcement.

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Godha Cabcon & Insulation Reports Q1 2026 Results

Economy, Market News, Markets - May 19, 2020

FPIs exit markets after economic package announcement.

FPIs exit markets after economic package announcement.

On 12th May 2020, Prime Minister Narendra Modi announced an economic package of ₹ 20 lakh crore under government’s Atma Nirbhar Bharat Abhiyan / Self-Reliant India. The national movement of Atma Nirbhar Bharat Abhiyan / Self-Reliant India initiated by Prime Minister Narendra Modi is to support India’s all small and local business. He emphasized on slogan viz. #VOCALFORLOCAL.

Scamper among FPIs:

Approximately 40% of FPI sales in cash and derivatives sectors were observed in second week of May. The data derived from stock exchange indicates some break up figures such as FPI’s sold stock worth ₹6,486 crore. Additionally, sales worth ₹2,869 crore and ₹737 crore were observed in index futures and stock futures respectively. These sales was executed in just 4 trading days in the second week of May 2020. The data further states that since the announcement of economic booster package of worth ₹20 lakh crore, FPIs buying activity has drastically declined.

Decline in NIFTY:

On 13th May 2020, Nifty observed its peak of 9,584 within the span of 2 days. Nifty abruptly fell by 534 points and on 15th May 2020 Nifty observed its low of 9,050. In the same time period, it has also been observed that there is a sudden decline in Nifty Bank. Nifty Bank dropped 1,440 points from 20,122 to 18,663.

If we compare between Indian stock market and global stock market, the sudden change is only observed in Indian stock market and not in global stock market. The Nifty and Nifty Bank indices are two of India’s largest traded derivatives, and both of these derivatives are struggling under pressure from FPI’s as they are selling their investment in a massive quantity since the announcement of economic booster package by Indian government. In second week of May 2020, the indices decreased by 5.6% and 7.15% respectively, compared to their respective highs.

Support from DII’s:

During the same period i.e. in the second week of May, there was no support from Domestic institutional investors (DIIs). Purchases from domestic institutional investors (DIIs) was also low, and they purchased stocks of only ₹1,896 crore in cash. There are several rules and restrictions on the companies who are doing business of mutual funds & insurance on derivative speculations. Therefore, they are virtually absent in the field of futures and options.

Massive sales by FPIs:

The media report noted that FPIs have been selling massively since the second week of May 2020 and have been slamming markets after the announcement of the financial package by Indian Government. In addition, the figures apart from second week of May 2020, the FPI’s net figures appear to be clearly positive, this is a bit misleading.

Loopholes while extracting data:

Exchanges will not adapt these facts when foreign companies sell shares and FPIs buy them This was the case on 7th May 2020, when a massive block of shares entered the market of Hindustan Unilever (HUL). Shares of HUL worth ₹26,300 crore were sold by international investors on 7th May 2020. The FPI’s bought a total worth ₹19,000 crore from the market in the same period, while DIIs bought stocks from the market in the same period worth ₹3,818 crore. Nearly all FPI’s and DIIs purchases were in HUL for that particular period.

When these ₹19,000 crore investments are removed from Hindustan Unilever shares, then FPI’s were net sellers in the cash and future segments. Sellers and major buyers of HUL were both international entities, but only those registered as FPIs are required to report their numbers to Securities and Exchange Board of India (SEBI) and stock exchanges viz. NSE & BSE. Meanwhile, net buying by DIIs in the month of May 2020 is just ₹1,056 crore after adjusting the activity of Hindustan Unilever.

Corporate bond funds: A mix of risks and returns.

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Visteon Invests $10M in India's Camera Manufacturing!

Economy, Markets - May 17, 2020

Mutual funds make limited borrowing from RBI's credit lines

Mutual funds make limited borrowing from RBI’s credit lines

Schemes closed by Franklin Templeton Mutual Funds:

Franklin Templeton Mutual Fund’s has decided to wind up their 6 debt schemes from 23rd April, 2020. The 6 schemes closed by Franklin Templeton Mutual Fund’s was worth ₹26,000 crore. The closure of these 6 schemes significantly reduced liquidity in the Indian bond market. Money of many retail investors and High Net worth Individuals (HNI’s) is blocked as there will be no option of liquidity available in their portfolios. Executives from Franklin Templeton Mutual Funds noted lock down outbreak of COVID-19 and the lock down imposed in state compelled them to take this decision. To control the uncertainty in the financial market, RBI launched new provisions to tackle this problem.

Reserve Bank of India launched special liquidity facility:

In late April 2020, Reserve Bank of India launched a special liquidity facility for mutual funds (SLF-MF). This special facility states a provision of total corpus of ₹50,000 crore is available and Mutual funds can borrow money through banks. The functioning will be, corpus of ₹50,000 crore is available and banks are allowed to borrow money from Reserve Bank of India for maximum 90 days. They can lend money to mutual fund firms by keeping collateral of their portfolio. Once the time span of 90 days elapses, the lender needs to pack back the money and take their collaterals. Further, banks will return money to the Central bank. Reserve Bank of India noted this facility can be availed by a bank only for lending back to Mutual funds.

Limited borrowing from RBI’s special liquidity facility:

The special liquidity facility provided by Reserve Bank of India (RBI) to mutual funds did not observe massive utilization. The utilization was only ₹2,430 crore from the total ₹50,000 crore window. Media reports noted, rather than lending money from bank, mutual fund’s preferred selling securities to bank and to their other parties. As mutual funds preferred to sell securities to the banks and other counter parties, this shown a spike in sales of debt papers of some NBFC’s.

Redemption of debt funds:

Media reports noted the special liquidity facility provided by Reserve Bank of India (RBI) to mutual funds has controlled the redemption of debt funds. In March 2020, various debt funds shown massive outflow. Due to this pandemic, a huge amount of redemption in debt funds is observed. In March 2020, there was a massive outflow in open-ended Debt funds of ₹1,94,915 crore. However, in the month of April 2020 the outflow continued, but inflow of ₹43,432 crore was executed.

In April 2020, it was observed that redemption in credit risk funds was ₹19,238.98 crore. Low duration fund also observed redemption of total ₹9,841.07 crore in the month of April. Further redemptions in various schemes like Ultra Short Duration fund, Money market fund, Short Duration fund amounted to ₹3,419.32 crore, ₹1,210.35 crore, ₹2,309.05 crore respectively.

Ease in NBFC’s sector:

The national movement of Atma Nirbhar Bharat Abhiyan / Self-Reliant India initiated by Prime Minister Narendra Modi is to support India’s all small and local businesses. Finance minister Nirmala Sitharaman announced economic booster package of ₹20 crore under government’s Atma Nirbhar Bharat Abhiyan / Self-Reliant India to fight against COVID-19. The economic booster package of ₹20 crore includes new provision to aid NBFC sector. Non-banking financial companies (NBFCs), Microfinance institutions (MFIs) and Housing finance companies (HFCs) will get liquidity support of ₹30,000 crore under liquidity scheme. Under this scheme, banks can invest in investment-grade debt papers issued by NBFCs through both primary and secondary market transactions. The investment up to ₹30,000 crore will be entirely guaranteed by the Government of India.

Additionally, NBFCs, MFIs, and HFCs will even get the assistance of ₹45,000 crore under partial guarantee scheme. This assistance provided by government is to provide liquidity support to the institutions whose credit rating is low. This will be applicable for all the unrated papers and the papers with ratings of AA and below issued by NBFCs, MFIs, and HFCs. This will enhance the liquidity support of all the institutions under NBFCs, MFIs, and HFCs. Under this scheme, the first 20% loss will be borne by the Indian government i.e. public sector banks resulting in a liquidity of ₹45,000 crore.

Bond markets hail G-sec auction

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Low-Priced Stock Below ₹20 Soars 59% in a Week, Sets New 52-Week Record

Markets - May 16, 2020

Bond markets hail G-sec auction

Bond markets hail G-sec auction

What are Government Securities (G-Sec)?

A Government Security, commonly known as G-Sec is a debt instrument. These are issued either by Central or State Government and are tradeable instruments. The Central Government issues both, treasury charges otherwise called T-bills and bonds or dated protections while the State issues just bonds or dated protections, which are known as the State Development Loans (SDLs). These are backed up by the Government and hence are also known as risk-free investments.

T-bills:

T-bills are of three types. Categorized on the basis of maturity period they are 91 days, 182 days, and 364 days. They do not carry any interest rate. They are issued at a discount to their true (PAR) value and redeemed at true (PAR) value.

Bonds:

Bonds differ from T-bills in two ways. They are long term and have no fixed tenure. They vary depending upon their issue. They pay interest semi annually.
Every bond issued is given a unique name or symbol. The symbol contains all the information defining the instrument. For example, let us consider “662GS2025A”, is a central government bond. If this is decoded, we get to know the bond has an annualized interest of 6.62%, which will be paid semi annually as 3.31% GS stands for type of security that is Government Securities (GS). 2025 indicates the year in which this bond will attain maturity. Finally upon maturity, the principle amount will be received. ‘A’ means it is a fresh issue. This is how the nomenclature of the bond is read.

Impact of additional borrowings on G-sec:

The announcement of government borrowings Rs 34,000 crore instead of the predetermined amount of Rs 30,000 crore, witnesses a positive upswing in the minds of investors. The very 1st auction, dated May 15, 2020 after the news of additional Governmental borrowing of Rs 4,000 crore was out, has seen a great response from the bond market. This announcement from the Reserve Bank of India (RBI) is resulting in spreading positivity in the bond market.

The auction response:

The auction that was held on May 15, auctioned three government bonds. These three bonds will mature in the year 2024, 2033 and 2050 respectively. Collectively, these three bonds intend to raise aggregate money amounting to Rs 30,000 crore. After analyzing the auction response, bonds having maturity in 2033 has been responded with bids around Rs 33,000 crore whereas the notified amount being Rs 11,000 crore. Similarly, bonds having maturity in 2050 has been responded with bids around Rs 21,000 crore whereas the notified amount being Rs 7,000 crore. This implies that above papers have been applied for three times the notified amounts. This is a bullish scenario which is getting reflected by the number of bids in the auction of the Government bonds. The cut-off returns also aligned with the expectations of the market. On the same day, returns on the new benchmark bonds secured 5.78%.

What can be the reason behind this optimistic shift?

Maybe, the reason behind this optimistic shift in the market is because of certain expectations from the RBI. Market is expecting RBI to announce certain measures with respect to the additional Governmental borrowing of Rs 4,000 crore which may benefit all. Another reason could be that the market believes that even though the Government has announced Rs 20 lakh crore as the fiscal package, the total cash outflow will not amount to entire amount specified, rather it will be much lower. Maybe the outflow stays within the limits of additional borrowings that has been announced. The first week of February brought an announcement that estimated borrowings for FY21 has been raised to Rs 12 lakh crore. This has led to an additional borrowing by Rs 4.2 lakh crore which is to be borrowed this year.

Market expects RBI to go for open market operation (OMO) purchases. OMO purchases of at least Rs 3 lakh crore while keeping in mind the principle of conservatism. If these prove to be strong indicators of the reasons behind market being optimistic presently, then in case the above mentioned reasons fails or faces unexpected delay, the market may swing in total opposite direction altogether. This implies it is the hope of the market that is gripping the market and making it act positive. Data from May 15, 2020 reveals that RBI has been buying securities and major portion of it is expected to be the Treasury bills. Further, these have been brought through OMO purchases amounting to Rs 1.2 lakh crore starting from April 2020.

Negative crude oil price leads to multiple legal battles

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Gold and Silver Aim for Key Resistance Zones

Business, Economy, Expert Views, Markets - May 15, 2020

What are liquid funds? Find more

Liquid funds are also debt funds that lend for a period of up to 91 days. These are the safest funds among all other schemes, being short-term. It is appropriate for putting money aside for emergencies. There is negligible risk of loss if one invests for minimum one month. These are known for giving up to 50% and at times even 100% higher returns than the savings bank account. These have low annual fee ranging from 0.30%- 0.70%

Portfolio with liquid funds fetches:

• No Lock-in Period – By the name, it suggests they have no lock-in period and give quick access to cash by redemption.

• Quick Withdrawals – Liquid fund withdrawals can be made within 24 hours.

• Lowest Interest Rate Risk – These funds mainly invest in fixed income securities which have a short maturity period, hence have one of the lowest rate risk as compared to others.

• Tax Benefits – Liquid Funds offer valuable tax benefits.

• Comparatively Good Returns – Liquid funds offer an average return of about 8% per annum.

For instance,

Franklin India Liquid Fund is presently giving a return of +7.04% p.a.

Tata Liquid Fund is presently giving a return of +6.91% p.a.

Edelweiss Liquid Fund is presently giving a return of +6.86% p.a.

Comparing and Contrasting:

Current Fixed Deposit Rates are ranging from 3.00%-6.75% p.a. covering all classes of investors.

Comparing these with the previously mentioned Credit Risk Fund and Liquid Fund, we can learn that these funds give more returns as compared to the Bank FDs.

Credit risk funds. Should you invest?

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