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NIPUN - Daily News and Market Round-Up

EQUITY MARKET ROUNDUP (Source : NSE India, BSE India)

26 February 2021 Today 01 March 2021 Change
Nifty Fifty 14529.15 14761.55 232.40
Sensex 49099.99 49849.84 749.85
Nifty MidCap 100 23268.50 23684.80 416.30
Nifty SmallCap 100 8049.70 8216.55 166.85
Sensex P/E (Trailing) 33.86 34.79 0.93
Nifty Fifty P/E (Trailing) 39.65 40.28 0.63
Nifty MidCap 100 P/E (Trailing) 89.06 90.66 1.60
Nifty SmallCap 100 P/E (Trailing) 38.10 38.90 0.80

DEBT MARKET ROUNDUP (Source : CCIL India)

(Weighted average yeild) 26 February 2021 01 March 2021 Change
Call Rates call rates 3.2429 3.2116 -0.0313
Repo 3.0479 3.1113 0.0634
TREP 3.2215 3.2177 -0.0038
5.77 G-Sec 2030 6.3162 6.2958 -0.0204
Market and Economy

Regulator IRDA plans to permit insurers to invest in InvIT, REIT bonds

The move could help bring more funds to InvITs and REITs, the hybrid models through which the government is attempting to channelise money into the cash-starved sector.

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View: India has its work cut out in Asia

You just moved into an apartment paying from your pocket after signing the lease agreement with well-defined clauses about rent escalation and exit terms. Six months down the line, a much-awaited flyover near your house gets inaugurated cutting down travel time to the central business district by at least 45 minutes. Overnight, your sleepy neighbourhood becomes prime property. Then, out of the blue, your landlord reneges on the contract and tells you that he needs 30% more rent, else the lease will get annulled without him paying any damages. Predictably, you will be up in arms. You may even contemplate moving the consumer court. As you read this, something similar is playing out in a high-profile solar park in Gujarat, where an existing contract was cancelled months after being awarded, causing outcry from some of the biggest global investors who have always championed India. For the bureaucrats at Ahmedabad, the prospects of tariffs from competing projects, in far more hospitable locations of the state, being quoted lower in subsequent bidding was reason enough to unilaterally scrap the tender and seek new bids. Commercial feuds are hardly new in India. But when they repeatedly alienate the country?s key economic allies and their corporate interests, they send the wrong signals ? that we remain unfriendly to foreign investors and favour home-grown cronies. Or, worst still, that global capital and corporations love India far more than India loves them. From pharma and airports, to retail and renewables, the issue is compounded by our wanton disregard for international arbitration orders. Mind you, it?s not just the government that is doubling down on such bad ideas by challenging court rulings that went in favour of Cairn Energy or Vodafone, after promising to abolish ?tax terrorism? in the first place. India?s private sector, too, including some of its most vaunted names, are equally culpable, blanking out the fact that they themselves rely on such dispute-resolution mechanisms when they feel wronged. Little wonder, then, that even when we break into the top 100 club on overall ?ease of doing business?, India is more than 100 notches below in the matrix of contract enforcement ? competing with the likes of Afghanistan and Zimbabwe that are worse than us. To quote the government?s own Economic Survey, it takes 1,445 days to resolve a commercial contract in India. Compare this with 120 days in Singapore and 403 days in Indonesia. In fact, according to the 2018-19 Economic Survey, the single-biggest constraint to ?ease of doing business? in India is its inability to enforce contracts, and ?given the potential economic and social multipliers of a well-functioning legal system, this may well be the best investment India can make?. The truth is, it has progressively become worse. Proud and disagreeing policy cheerleaders hard-sell the fact that even during the Covid-19 pandemic at its peak, India attracted the highest-ever FDI inflows for the first eight months of the fiscal year. But, remember, almost half of that $58.3 billion is due to the dollar deluge that we saw chase a single target ?Reliance Industries. And it is anybody?s guess that almost all their investment agreements ? from Silicon Valley titans Google and Facebook or even Wall Street?s smart suits KKR and General Atlantic (GA) ? would have global arbitration as means to resolve any sparring, should they arise. If the SOS sent out by Abu Dhabi Investment Authority (ADIA) last August during the takeover tussle over Mumbai airport doesn?t stir things up, then one hopes the recent communiqu? from Singapore?s Temasek-backed O2 Power to the Prime Minister?s Office after the Gujarat solar park snafu will. It?s not every day that a quasi-government body would write, ??this backing out will severely dent not just Gujarat?s but the whole country?s investment image in the global platform?. Between Temasek and sister concern GIC (Government of Singapore Investment Corp), the sovereign wealth fund of the island nation, they are by far India?s largest source of long-term FDI capital. If global capital cannot safeguard their economic interests, their dollars will simply find ways to reach markets that really need and nurture it, even if they are a fraction of our size or heft (see table). Or expect backlash when our corporations globalise. At a time when India seeks to position itself as a counterweight to Chinese economic hegemony, dishonouring agreements is the most expensive folly. As Shivshankar Menon put it succinctly recently in an interview, India?s destiny in Asia will be what we choose to do in the region. If we walk away from trade pacts, or our economic engagements fail to match up to the hype and hoopla of the we-are-open-for business sales pitch, then no amount of political, military or security links can carry that relationship. We can?t walk on one leg. 81279610

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Mutual fund penetration in India among lowest, shows Jefferies report

An analysis done by Jefferies shows India's MF AUM as a percentage of GDP at 12 per cent is among the lowest and a fraction of global average of 63 per cent

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Oil rises as vaccine and US stimulus boost demand outlook

Brent crude rose 51 cents, or 0.8%, at $64.93 a barrel by 11:29 a.m. EST (1629 GMT), and U.S. West Texas Intermediate (WTI) crude gained 28 cents, or 0.5%, to $61.78 a barrel.

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High frequency indicators point to recovery: RBI

In terms of nominal GDP, 96 per cent of pre-pandemic economic activity has been restored, assuming that the National Statistical Office?s first advance estimates hold. All high frequency indicators point to a recovery based on a revival of consumption is underway. But it could be short-lived, the Bulletin warned.

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NSE signs pact with various entities to set up international bullion exchange at GIFT City

The other signatories are Multi Commodity Exchange of India Ltd, India INX International Exchange Ltd, National Securities Depository Ltd and Central Depository Services (India) Ltd, according to a press release.

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Flipkart makes key changes in leadership team ahead of the IPO plan

As the e-commerce firm focuses on building and growing its business further, it has made a few leadership role changes in areas such as supply chain, category design operations and fintech and payment

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Emerging markets feel the heat of the 'bondfire'

Most major investment banks were predicting a stellar 2021 for emerging market assets as long as one crucial snag - global borrowing costs rising too fast - was avoided. Well guess what, they are on a tear.

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US manufacturing activity jumps to 3-year high in February

It was the strongest performance since February 2018. Any reading above 50 indicates expansion in the manufacturing sector.

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GST collections cross Rs 1 trillion for fifth consecutive month in Feb

The government attributed the robust mop-up to closer monitoring against fake billing, deep data analytics using data from multiple sources

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Commercial bank credit to midsize firms up 27.9%, shows RBI data

Bankers said the economic recovery has begun to translate into a rise in demand for loans.

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RBI wary of contraction in credit to firms

Bank credit growth has, however, returned to the levels observed in the early months of the pandemic

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Ahead of Market: 12 things that will decide stock action on Tuesday

Rohit Singre, Senior Technical Analyst at LKP Securities said, "Nifty has formed immediate support near 14,640-14,580 zone and good resistance is coming near 14,810 zone. Any break above said levels can push index towards 15,000-mark again."

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Finance Minister: NSE glitch cost govt immensely

Finance minister Nirmala Sitharaman said the unanticipated technical glitch that halted trading at the National Stock Exchange had cost the government ?immensely? and may have been an issue of interoperability.

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View: Social media firms are not digital media companies. The new IT guidelines fail to get this fact

But in ostensibly trying to create a level censorship field to discourage future misuse, GoI has ingeniously killed two birds with one stone: a press release that criticises the government could be forced down as easily as a social media handle that promotes violent insurrection.

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