Oil prices once again hardened in early trades on Monday to close in on $95/bbl as jitters over potential conflict between Russia and Ukraine heightened. The US and the EU have also warned Russia of sanctions if it invaded Ukraine. EU President has stated that Russia would be cut off from international financial markets and denied access to key exports needed to modernise its economy if it invaded Ukraine. It is feared that if Russia actually invades Ukraine, then Brent could easily spike beyond the $100/bbl mark.
After all the negative press in 2019 and 2020, credit risk funds are suddenly back in the reckoning all over again. In the year 2021, credit risk funds saw inflows of Rs.917 crore against net outflows of Rs.35,710 crore in 2020. The year 2020 was tumultuous for credit risk funds with a spate of downgrades, defaults and the controversial decision by Franklin Templeton to suspend sale and redemption of 6 of its debt funds. Over the last 1 year, performance of credit risk funds has been impressive at robust 9.4% returns.
For the month of Dec-21, it has been reported that Saudi Arabia’s crude oil output increased by 110,000 bpd over Nov-21 to 10.02 million bpd. However, exports were marginally lower at 6.937 million bpd. In the last few months, Saudi Arabia and other OPEC countries have been trying to ramp up output of crude each month as global oil demand is on a recovery path. Saudi Arabia in particular and the OPEC in general holds the key to price of crude and there have been repeated demands to boost supply to temper prices.
India’s services exports are expected to touch $325 billion FY23, on the back of full resumption of most contact intensive services. For FY22, the services exports are pegged to touch $250 billion with $209.83 billion already achieved till Jan-21. The new foreign trade policy has given a further boost to outbound shipments. Government has already announced the Services Export from India Scheme (SEIS) and the Duty Remission on Export of Services Scheme (DRESS). Services exports grew at 9% CAGR for last 20 years.
Archean Chemical Industries filed draft red herring prospectus (DRHP) with SEBI for its proposed IPO. The IPO will comprise of Rs.1,000 crore of fresh issue and 19.07 million shares as part of the OFS by promoters and early shareholders. The new issue component will be used to redeem Rs.800 crore of NCDs to reduce its debt burden. Archean is a leading specialty marine chemicals manufacturer. For FY21, Archean had revenues of Rs.741 crore and net profits of Rs.67 crore. IIFL Securities, I-SEC and JM are the lead managers.
Foreign portfolio investors pulled out Rs.18,856 crore from Indian markets in the first 3 weeks of Feb-22. This was amidst rising geopolitical tensions and a likely Fed rate hike in Mar-22. FPIs sold Rs.15,342 crore in equities and Rs.3,629 crore in the bond markets. This marks the 5th consecutive month of foreign fund outflows. Geopolitical tensions in Ukraine and the possibility of the Fed front-ending rate hikes by 50 bps in Mar-22 are the big concerns. In the last 1 year, FPIs pulled out $8 billion, the worse since year 2009.
For the week ended 18th Feb, 5 of the 10 most valuable companies on the Nifty by market capitalization added Rs.85,713 crore. TCS, RIL and HUVR were key gainers in a volatile market. For the week, TCS added Rs.36,695 crore, Reliance Rs.32,015 crore, Hindustan Unilever Rs.12,782 crore, HDFC Rs.2,704 crore and Bajaj Finance Rs.1,518 crore. Among losers, ICICI Bank lost Rs.28,780 crore, SBI Rs.12,361 crore, Infosys Rs.5,846 crore, HDFC Bank Rs.3,400 crore and Bharti Airtel Rs.962 crore. Nifty ended marginally lower.
India is all set to unveil an ambitious Rs.104,000 crore program to construct 5,795 KM of national highways in 117 aspirational districts. This is in addition to 222 projects that are already underway in these areas. The National Highways Authority of India (NHAI) will invest Rs.1.04 trillion on these projects. This is part of the 4-year aspirational districts program to transform least-developed areas by convergence of central and state schemes. Most projects will go to UP, MP, Jharkhand, Chhattisgarh, Maharashtra and Odisha.