Business Today 12-Jul-20

It’s up. It’s down. It’s up, but down. Down, but up. Huh! If you’ve been trying to make sense of the stock markets, then you aren’t alone. Millions get exasperated deciphering every move of the markets. Especially today. Whether it’s the unflinching faith in the power of the Indian economy and corporates or just irrational exuberance, despite the fall the markets are trading at double the valuation of the Lehman crisis in 2008. The December, 2019 peak was, in fact, higher than the Lehman peak. But bare facts would tell you, the sharp recovery after a precipitous 39.4 per cent cent fall since January and a sustained run in the stock markets is built on pretty weak fundamentals. Corporate earnings are on a slippery wicket, and will continue to be…

3,774 Cases admitted at the end of March 2020 63.8% Growth in insolvency applications in FY20 Steady Rise in Insolvency Applications Since IBC Launch Financial Creditors Play 2nd Fiddle to Operational Creditors Manufacturing Accounts for Biggest Chunk of Cases… … in Manufacturing, Metals, Textiles, Apparel & Leather Dominate Few Resolutions, Rise in Number of Cases Closed by Liquidation…

THE BIG TRADEOFF China dominates bilateral trade. India has a very small share of China’s imports. China, on the other hand, accounts for 13.8% of India’s imports DRAGON BEHIND WIDE TRADE GAP TOP TRADING PARTNER China & Hong Kong together are india’s largest trading partners, followed by the USA KEY ITEMS ARE INVESTORS IN MAJOR INDIAN START-UPS INDIA HAS TIGHTENED NORMS FOR CHINESE FDI Greater scrutiny of companies from China looking to invest directly in India Investors looking to exit from companies will face greater due diligence Companies with existing Chinese investors may find it difficult to raise fresh funds Start-ups like paytm, Bigbasket, with big Chinese holdings, will find it tough to raise funds Throttling investments from China is another blow to start-up funding in India Will impact foreign…

The Union government earned only ₹50,304 crore from disinvestment in FY20, against the Budget target of ₹1.05 lakh crore. This was later revised downwards to ₹65,000 crore. The government failed to push asset sales due to poor market conditions Tax revenues were 90 per cent of revised estimates for the year Capital expenditure was 97 per cent of revised estimates. The government held back on capital spending to bring fiscal deficit under control Fiscal deficit hit a seven-year high of 4.6 per cent of GDP (as against the revised target of 3.8 per cent of GDP) The reason was shortfall in revenues in the wake of slowing GDP growth. Excluding agriculture and community services, real gross value added grew 1.1 per cent in fourth quarter of FY20, the lowest since…

FII holdings in Nifty 500 fell 140 basis points QoQ and 80 basis points YoY to 21 per cent in fourth quarter of FY20 They reduced ownership in 67 per cent Nifty 500 and 90 per cent Nifty 50 companies QoQ On the other hand, DII holdings of Nifty 500 rose 20 basis points QoQ and 90 basis points YoY to 14.8 per cent DIIs increased stake in 61 per cent Nifty 500 and 78 per cent Nifty 50 companies QoQ Promoters took advantage of market crash and increased holdings in Nifty 500 by 130 basis points QoQ and 150 basis points YoY to 50.5 per cent…

Tight turns, steep slopes, sudden highs and inversions are characteristics of a roller coaster. Those have also been the hallmarks of the Indian stock markets for close to three months. From hitting a three-year low on March 23 with a 13 per cent fall to bouncing back just three days later, it has shown deep falls and sharp recoveries time and again. But don’t get fooled by that. There may be a storm brewing beneath the calm. After all, this sharp recovery is built on weak corporate and economic fundamentals and huge uncertainty in the immediate future. With India’s economy projected to shrink 6.8 per cent in FY21, according to SBI Ecowrap (it grew slowest in 11 years at 3.1 per cent in the March quarter), early bird corporate results…