Demonetization of Currency, Donalds Trumps, Sensex slides 699 points- Weekly Digest #22

Monday- 7th November 2016

  • Private equity firm, Warburg Pincus, has invested $75 million transport logistics provider Rivigo Services for a minority stake.
  • ICICI Bank reported an insignificant 2.4% rise in its Q2 profit, at ₹3,102 crores, up from previous year’s ₹3,030 crores. A surge in corporate bad loans nullified the gains from the sale of stake in its insurance venture.
  • PNB Housing Finance made a decent debut in the market, with the share price closing at 15% premium at ₹890.60 in comparison to issue price of ₹775. It touched the intraday high of ₹902.95

 

Tuesday-8th November 2016

  • In the biggest step to curb black money, PM Narendra Modi announced demonetization scheme, where old ₹500 and ₹1,000 currency ceased to be legal tenders and replaced by new ₹500 and ₹2,000 currency.
  • Two American mutual funds, Valic and Fidelity have marked down the value of their investments in Flipkart, to $95.84 per share and $81.55 per share respectively. This comes at the time when Flipkart is seeking fresh round of funding.
  • IndiGo’s parent InterGlobe Aviation reported a a 24% rise in its Q2 profits at ₹139.85 crores. This has been attributed mainly to higher passenger revenues.
  • Varun Bev made a tepid debut in the market, with the share listing at 3.4% discount at ₹430 against issue price of ₹445. However, it closed at ₹461.9.
  • National Pharmaceutical Pricing Authority (NPPA) is seeking to recover over ₹1,000 crores from drug makers for allegedly overcharging patients.

 

Wednesday- 9th November 2016

  • Donald Trump won the 2016 US presidential elections to become the 45th president of the United states of America. He defeated the rival party’s Hillary Clinton by 279-228 to win the elections.
  • The healthcare index at the BSE, surged to 15472, up 1.48% following US presidential election results. Shares of Sun Pharma, Dr Reddy’s, Natco and Lupin, among others, posted a sharp rise at the end of day’s trading.
  • Shares of jewellery and luxury goods companies shed up to 17% in intrada trade following the demonetization of ₹500 and ₹1,000 currency. This sector previously relied heavily on cash transactions, thus crashing their stock.
  • Following the news of Trump victory, Indian Indices shed up to 6% due to initial panic selling. However, it recovered to end at just 1.3% below at the close of the day.
  • Gold prices shot up as high as 5% in intraday trade but closed around 2% higher. This has been due to demonetization of currency, as people are looking to spend this old currency for the purchase of securities.

 

Thursday- 10th November 2016

  • The stock market recovered from Donald Trump victory and demonetization. The Sensex rose 1% to 27,517.68, while the Nifty rose 1.1% to end at 8,525.75.
  • SBI is in talks with global sovereign wealth funds and strategic investors to sell up to 5% stake in SBI Life. It is a life insurance joint venture with BNP Paribas Cardiff. It is currently valued at ₹37,000-40,000 crores.
  • Passenger vehicle sales in the domestic market rose 4.48% in October, slower than the month before with manufacturers resorting to inventory correction after pushing stocks in the previous month ahead of the peak of the festive season.
  • Tata Chemicals reported a small increase in Q2 profits at ₹293.04 crores, up from previous year’s ₹292.80 crores. This has been attributed to lower fertiliser sale.
  • Bank Nifty index jumped 3.5%, its highest single-day gain in eight months. This comes as the government’s move to demonetise select notes would help them access a cheap source of funds. The PSU Bank index shot up 8.7%.

 

Friday- 11th November 2016

  • Majority board members of Tata sons, including 3 independent directors opposed the move for a unanimous decision to support Mistry, as in the case of Indian Hotels and Tata Chemicals. Thus the motion was not adopted, giving Tata sons a crucial victory over its former chief.
  • India’s largest direct-to-home (DTH) player Dish TV , and NASDAQ-listed Videocon d2h (Vd2h) have decided to merge operations to form the single largest pay-TV operator in the world.Dish TV shareholders will own 55.4%, while the remaining 44.6% shares will be owned by Vd2h shareholders in the new entity.
  • SBI quarterly earning plunged by 35% for the second quarter to ₹2,538 crores from previous year’s ₹3,879 crores. This has been attributed to bad loans and weak interest income.
  • Mahindra & Mahindra saw a 28.8% jump in profit after tax for Q2 to ₹1,253 crores from last year’s ₹973 crore. This has been due to strong tractor business and higher dividend income.
  • The Sensex fell nearly 700 points to 26818.82, its lowest closing since June 29, while the Nifty slid over 229 points to 8296.30 due to the selloff in Asian shares and currencies.

 

Source: The Economic Times

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