India’s crude oil imports look set to cross $100 billion in FY22. Amidst rising crude prices, this is almost twice of FY21. India has already spent over $94 billion on oil imports in the first 10 months ending Jan-22. For FY22, the total oil import bill is expected at a record $115 billion. However, these imports have also generated exports worth $34 billion in value added products. In terms of volumes, the final figure may be just above 200 million tonnes but higher prices played spoilsport. Brent surged to $105/bbl last Thursday.
During the week, the top 10 stocks by market cap lost Rs.333,308 crore overall as BSE market cap touched a 7-month low. Amidst rising geopolitical tensions and rising crude prices. RIL and TCS were the top losers. TCS lost Rs.101,761 crore while Reliance lost Rs.94,828 crore during the week. Among other losers, HDFC Bank gave up Rs.31,598 crore while SBI fell by Rs.29,094 crore and Hindustan Unilever lost Rs.33,235 crore and Bharti Airtel and ICICI Bank lost over Rs.13,200 crore each. There were no weekly gainers last week.
Berkshire Hathaway profits for Q4-2021 were boosted by gains in businesses and stock investments such as Apple. Not surprisingly, Berkshire Hathaway also repurchased its own stock to the tune of $6.9 billion even as it remained unconvinced about fresh investments in the current markets. Buffett once again put the focus on buybacks to add value. The cash stash stood at a whopping $147 billion. Quarterly income was up 45% yoy. Berkshire stock gained 30% in 2021, beating the 29% gains on the Standard & Poor index.
Amidst rising geopolitical tensions in the Caucuses, government announced its Sovereign Gold Bond (SGB) Scheme 2021-22 – Series X. The subscription opens on 28th February and will remain open through the week. RBI set the price for the SGB issue at Rs.5,109 per gram. However, digital applications get a discount of Rs.50 per gram. Gold, being a safe haven in troubled times, analysts are favouring investing in the latest tranche of gold bonds. Bonds are sold through SHCIL, designated post offices, banks and stock exchanges.
Future Retail suspended most of its online and offline operations after Reliance bid to take over flagship stores against missed lease payments. Out of the 1,700 outlets of the Future group, nearly 200 stores are taken over and will be rebranded as Reliance Retail stores. The move assumes significance after RRIL’s bid to buy Future group for $3.4 billion was stymied by Amazon on technical grounds. Amazon had argued that Future-Reliance deal had violated their right of first refusal. Amazon may not have much choice now.
Weak PSU banks Central Bank of India and Punjab & Sind Bank will get the lion’s share of Rs.15,000 crore earmarked for capital infusion in the current fiscal. This will help banks meet regulatory requirements. Most of the money will go to banks who had been previously funded by zero coupon bonds. In Budget-22 government trimmed capital infusion target from Rs.20,000 crore to Rs 15,000 crore for FY22. This would probably be the last round of support for these banks from the government with further infusions unlikely.
Britannia Industries fell 3% on Friday as input cost pressures became a major overhang for most FMCG companies, including Britannia. It is now trading close to its 52-week low price. In last 6 months, Britannia is down 12% against a mere 0.37% decline for the Nifty. Britannia is the market leader in premium biscuits and bakery products segment but input inflation has put tremendous pressure on Britannia. Its input costs were 4% higher on a sequential basis and 20% higher on a yoy basis. Rural markets also slowed sharply.
FPIs pulled have pulled out over Rs.35,000 crore from Indian markets in February. The total equity pull-out stood at $29 billion for FY22, of which $22 billion has exited just in the last 5 months since Oct-21. The FPI selling was triggered by Fed’s decision and the ongoing war between Russia and Ukraine. Also, the pace of outflows increased from EMs after the US Fed announced a hawkish monetary trajectory. With the input costs telling on operating profits this quarter, markets are also wary of current P/E valuations.