Gold imports for the first six months of FY22 surged to $24 billion compared to just $6.8 billion in first half of FY21. In the month of September 2021 alone, the gold imports stood at a record $5.11 billion. One of the downsides of this jump in gold imports was the widening of the trade deficit to a record $22.6 billion. India is already the largest importer of gold and imports around 900 tonnes annually. People have been buying gold ahead of the festive season and in anticipation, most jewellers are creating inventories.
A total of 8 out the top-10 most valued companies by market cap on the Nifty added Rs.152,355 crore in value last week. The big gainers were HDFC Bank and SBI, which also led the Bank Nifty sharply higher. Among big gainers, HDFC Bank added Rs.46,349 crore while SBI added Rs.29,273 crore. Other gainers of the week included Reliance Industries Rs.18,384 crore, ICICI Bank Rs.16,861 crore , HDFC Rs.16,021 crore and Kotak Bank Rs.15,944 crore. TCS saw erosion of Rs.119,849 crore post Q2 results on missed estimates.
Recently listed Route Mobile got shareholders’ approval to raise Rs.2,000 crore via sale of securities. The majority of shareholders also approved the increase in limit of foreign portfolio investments in Route. The motion to raise funding of Rs.2,000 crore was passed with almost 95% positive votes. However, nearly a quarter of the public institutional shareholders who participated in the voting, gave a thumbs down to the proposal. However, positive voting in the case of increasing the investment limits for FPIs was 99%.
Foreign portfolio investors or FPIs turned net sellers in the first two weeks of October. This reverses the positive flow trend of August and September. This can be attributed to weakness in the rupee and global concerns over the Evergrande crisis as well rising US inflation as well as the hawkish tone of the Fed. The FPIs have pulled out Rs.1,698 crore in October, which is much smaller compared to the inflows in August and September. Going ahead, Brent prices could be a key factor as it has larger implications for India.
The sharp spike in coal prices in the global markets has pulled down India’s coal imports. In Aug-21, Indian coal imports fell 2.7% YOY to 15.22 MT. This is despite the fact that domestic demand has spurted due to higher power demand. Out of total imports in Aug-21, non-coking coal was 9.08 MT, while coking coal imports surged to 4.37 MT. Sequentially, the coal imports were lower by 6.7%. In the Apr-Aug period, non-coking imports were up 18.8% YOY at 60.85 MT while coking coal imports were up 54.3% at 22.19 MT.
PE fund Actis completed fundraising for Actis Energy 5 (AE5 Fund). It significantly exceeded its target of $4 billion, hinting at the demand traction for green energy investments. The Actis Energy Team will deploy around $6 billion of investable capital. Out of the capital raised, $850 million will be deployed in India over next 4-5 years. Actis has an established track record having invested $ 800 million in last 7 years to establish 3 GW of solar and wind capacity. Investors are pension funds, SWFs, insurers and endowments.
Finance ministry will seek approval for setting up a company for transfer and subsequently monetise land and non-core assets of PSUs that have embarked on disinvestment. A special purpose vehicle or will be set up to hold these assets which would then be monetized. In some cases, the DIPAM believes that there was no point of the land parcels going with the company and in such cases they would be monetized. The list includes BPCL, SCI, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat etc, where this logic will be applied.
Even as the retail CPI inflation tapered lower to 4.35%, the wholesale price inflation or WPI stayed in double digits for sixth consecutive month. Since WPI inflation indicates producer inflation, it raises the risk of further supply chain driven inflation in India. Of course, the WPI inflation in Sep-21 at 10.66% was a tad lower than 11.39% in Aug-21. However, crude oil plays a big role in pushing up WPI inflation due to the downstream effect. Interestingly, wholesale fuel and power inflation touched 24.81% in September.