With sanctions tightening, it looks like Russia may be on the brink of a major external default. Russian bonds are already trading deep in distressed levels after the US Treasury halted dollar debt payments in US banks and Russia paid investors in Rouble instead of dollars. This will be its first default, if it happens, in over a century with the last default in 1917 after the Bolshevik revolution. The 1998 default was only on domestic debt. Dollar bonds have 30-day grace periods. For now, there seems no quick-fix for Russia.
The 10 most valuable companies on the Nifty saw 4 companies losing as much as Rs.105,848 crore during the previous week. IT was down and banks ended with gains. Among the major losers, TCS lost Rs.40,641 crore, Infosys Rs.36,704 crore, Reliance Industries Rs.25,504 crore and Bajaj Finance Rs.3,000 crore. But there were several gainers too. HUL gained Rs.24,048 crore, ICICI Bank Rs.12,404 crore and SBI gained Rs.7,051 crore. In addition, HDFC Bank added Rs.4,880 crore, with Bharti and HDFC making marginal gains.
FY22 was the year dominated by strong SIP flows and robust inflows into equity funds. In fact, equity funds saw inflows of Rs.1.64 trillion in FY22. This is contrast to net outflows of Rs.25,966 crore in FY21. The month of Mar-22 witnessed record equity fund inflows of Rs.28,464 crore. Total SIP flows during FY22 touched an all-time high of Rs.124,566 crore with SIP flows touching record inflows of Rs.12,328 crore in the month of Mar-22 alone. For the first time, AUM of equity funds has crossed the AUM of debt funds.
After being consistent sellers for 6 months between Oct-21 and Mar-22, FPIs tuned net buyers in Apr-22, although these may be early days still. For the first week of April, FPIs were net buyers to the tune of Rs.7,707 crore with a lot of targeted buying visible in the mid-cap space. However, the geopolitical milieu remains tense and risks like commodity inflation and Fed hawkishness are still real. Apart from being net buyers in equities, FPIs were also net buyers worth Rs.1,403 crore in debt markets in first week of Apr-22.
Finance Minister is scheduled to meet public sector bank chiefs on 23rd April. The purpose is to review the performance of lenders and the progress on various schemes launched by the government for reviving the economy. This will be the first full-fledged meeting after Budget-2022. Banks are likely to be urged to give a big push to industrial and non-farm credit. The meeting is likely to set the agenda for FY23. After 5 years of losses, PSBs earned net profit of Rs.31,820 crore in FY21 and could cross Rs.50,000 crore in FY22.
IndiGo, which has over 55% market share in Indian domestic air traffic, is now the 6th largest carrier in the world in terms of passenger volume. This is based on Mar-22 data and has been affirmed by the UK-based Official Airline Guide (OAG). IndiGo carried over 2.02 million passengers in Mar-22, which is already an Asian record. IndiGo also held the 8th spot among top airlines in terms of seat capacity. Even in terms of market size, IndiGo is among global top-10. It connects 73 domestic and 24 International destinations.
Thanks to the follow-on public offer, Ruchi Soya is now debt-free. It has used the proceeds of the FPO to repay debt of Rs.2,925 crore, more than originally anticipated. On Friday, the manner of utilization of the proceeds of the FPO were approved by the Audit Committee. The balance funds will be used by Ruchi Soya to strengthening manufacturing and R&D capabilities as well as for branding and promotion. The Ruchi Soya stock has rallied hard post the FPO and now has a market capitalization of Rs.33,500 crore.
On Friday, after the monetary policy announcement, equity markets gave up early gains but bond yield spiked sharply to 7.12% levels. There were two reasons. On the one hand, the RBI raised its inflation target for FY23 by 120 bps from 4.5% to 5.7%. In addition, the introduction of the standing deposit facility (SDF) at 3.75% made the reverse repo redundant and effectively translated into a 40 bps increase in the reverse repo rates. Both these factors contributed sharply to the spike in bond yields to a 34-month high of 7.12%.
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