The OPEC (Organisation of the Petroleum Exporting Countries) agreed to curb production for the first time after eight years. The preliminary plan is to cut the production of oil to 32.5 million barrels from 33.2 million barrels per day. Although OPEC oil ministries haven’t signed an agreement but it is likely to go on papers by November 2016. Oil prices rose by appx 6% last week.
Gross domestic product (GDP) of US expanded at an inflation-adjusted growth rate of 1.4% in the second quarter. Fed policy makers project the economy to grow at a pace of 1.8% throughout the fiscal year. The second quarter GDP report showed a measure of business spending, non-residential fixed investment, rose at a 1% rate versus a prior estimate of a 0.9% decline.
The US economy has seen more than an expected decline in September, amid the slowest growth reported this year. Manufacturing PMI (Purchasing Managers Index) for September slipped to 51.4, down from 52.0 in August. Eurozone economy is slumping, PMI for September slipped to 52.6, down from 52.9 in August. The PMI level of September is almost at a 20 month low.
The WTO predicts dramatic slowing in global trade; WTO had cut down its forecast for global trade growth to 1.7% from previous estimate of 2.8%. Cut down in forecasts is mainly due to slowdown in China and falling levels of imports into the US.The WTO also said it is expecting slower 2017 trade growth than in its previous forecast, with a rise of 1.8% – 3.1% rather than the 3.6 % it had earlier estimated.
The Sensex and the Nifty fell by 2.80% and 2.49% in the last week.
The Indian army on 29th September 2016 reported that they carried out overnight “surgical strikes” on what they alleged as terrorist bases across the country’s de facto border with Pakistan. This move is likely to increase the soaring tensions between India-Pakistan. Sensex and Nifty plunged by 465 points and 154 points respectively when the news hit the market. Volatility Index (VIX) spiked by 10% on the day of the event.
Rs. 65250 Crores got declared in the Government of India’s black money Income disclosure scheme, which closed this week.
The Government is slated to sell a 7% stake in Hindustan Copper through an OFS (offer for sale) route. Government has set a floor price of Rs. 62 which is 5% discount to the trading price on 28th September 2016 i.e. Rs. 65.
Bank of India has sold 18% stake in the insurance joint venture – Star Union Dia-ichi (SUD) Life insurance Company to its Japanese partners. Post this transaction shareholding of Bank of India will come down to 30% from 48% in SUD.
Cox & Kings Ltd share price rose by approximately 15% & 36% in last one & three months respectively. On a, consolidated basis, the company has Rs. 670 million as finance cost in their books. The Company’s management said that, recent stake sale proceeds and fund infusion by promoters will be used to cut down the debt of the company. In the recently announced June quarterly result, debt is down by 15% when compared with the previous quarterly result.
Yes Bank recently scrapped the plan to raise up to $1billion by selling new shares to institutional investors through Qualified Institutional Placement (QIP) route. The bank is now planning to raise Rs.100000 million through different tranches on a private placement basis. In the first tranche, the Bank would be raising Rs. 25000 million through an issue of long-term bonds. Earlier this week, YES Bank had informed the bourses about raising Rs 3300 million by issuing a seven years long-term green infrastructure bond to Dutch Development Bank FMO on a private placement basis.
Bharat Financial Inclusion on 29th September 2016 submitted a notice to exchanges stating that the company has raised Rs.7490 million by selling 9.74 million shares at Rs.770 to QIB’s (Qualified Institutional Buyers). The stock price rose by 3.17% in last week.
Microsoft and Bank of America Merrill Lynch have announced they are working together for a new ‘Block Chain’ project which makes financial transactions more efficient. All over the world, globally reputed banks are shifting to block chain transactions to make their daily activities more efficient. Although a significant percentage of revenue for Microsoft from block chain segment would be reflected only after two or three years as the project is in early stages.
Apple and Deloitte announced a partnership on 28th September 2016 in which the consultant (Deloitte) will open a new methods & practices to help corporate clients work with Apple products. These efforts from Apple are taken to boost the sales of iPhone, iPad and Mac.
Apple has setup its first directly invested research and development centre in China with total investment of $50 million to develop advanced technology.
Industry and Stock Specific trends
The sectoral indices closed in the negative territory last week. The S&P Bankex, IT, PSU, Auto and Oil & Gas indiceslost by 3.11%, 0.68%, 1.74%, 1.82% and 0.49% respectively in the last week.
SBI Bank has witnessed rise in turnover and open interest in the stock futures segment. The Stock price of SBI Bank fell by 0.7% in the last week. YES Bank witnessed sudden spike in turnover and open interest in the stock futures segment. The stock price of Yes Bank rose by 1.8% in the last week.
The Indian rupee tumbled on 29th September 2016 amid surgical strike by the Indian army on terrorist bases across the country’s defacto border with Pakistan, rupee touched week’s low 66.95 on the day of event. Weekly Indian rupee depreciated by 0.01% against USD.