The markets would be broadly pleased that the ministerial portfolios have not been tinkered with. Among the key portfolios; Nirmala Sitharaman retains Finance, Amit Shah retains home, Rajnath Singh defence, and Dr S Jaishankar retains external affairs. That is reflective of continuity overall and Piyush Goyal also retains the critical commerce portfolio. All eyes will now shift to the full budget to be presented by Nirmala Sitharaman in middle of July. That will set the tone for the economic reforms agenda of the government.
According to an FE poll, the CPI inflation for May could have just about risen to 5%. The inflation rate was at 4.83% in April 2024, so it looks like the food pressure is back. Within the food basket, most of the stress is likely to come from vegetables and pulses. This based on a survey of 18 economists. The election related spending also normally spikes the inflation in the month after the polls. The estimate of CME is that food inflation may have gone up 40 bps from 8.7% in April to 9.1% in May 2024. Core inflation may be lower.
Inflows into equity funds in May 2024 surged by 83% to Rs34,697 crore, driven by a combination of SIPs and NFOs. The SIP flows were at a record level of Rs20,904 crore while the NFO surge was dominated by the Rs9,563 NFO collections of the HDFC Manufacturing Fund, which made thematic funds the top grosser among the equity funds categories. Even debt funds saw net inflows of over Rs42,000 crore, largely led by liquid funds and money market funds. Overall MF inflows in May 2024 was more than Rs1.11 trillion.
In a last ditch effort to save Paytm, Vijay Shekhar Sharma is dialling up former executives to rebuild the Paytm brand, which has taken a lot of beating in recent months. The company has been under stress ever since RBI annulled its banking license. Some of the former executives that Sharma has approached to come back to Paytm include Renu Satti, Kiran Vasireddy, and Nehul Malhotra. In its quest for rapid growth, the company had gone lax on compliance, but it wants make one last effort at reviving the dream team.
Kotak MF has launched a dedicated Kotak Special Opportunities Fund. The special situations fund will look to capitalize on special events like corporate restructuring, mergers & acquisitions, sale of divisions, major policy changes, regulatory shifts, technology disruption etc. The fund will be sector agnostic and also market cap agnostic in its search for such candidates to include in the fund. The NFO of the new fund will open till June 24, 2024. Special Ops Funds offer a lot of discretion to fund managers to ride on momentum.
Brent crude prices bounced to $81/bbl after staying below $80/bbl for nearly a week. This enthusiasm is on the back of increased summer fuel demand. However, with the dollar strengthening sharply in recent days as depicted by the dollar index (DXY), it could put a lid on any spike in oil prices. Fed looks unlikely to cut interest rates in the near future and that is likely to keep bond yields elevated and also the dollar in a position of strength. Reuters estimates that Brent could bounce to $86/bbl by third quarter of 2024.
JSW Energy announced its foray into energy storage devices, a key requirement to promote rapid spread of green energy. It commenced construction activities for its battery energy storage unit. The company has signed a 7-year green hydrogen supply agreement with JSW Steel for 3,800 tonnes of green hydrogen supply per year. While chunk of the green hydrogen and green oxygen will be used within the Jindal group, it will also have surpluses for external supply. JSW Energy has locked in generational capacity of 13.3 GW. A recent report by Accenture highlights that 76% of the consumes feel inundated by too much choice. It looks like consumers are getting confused with ample brands available offline and online. Purchasers say they have abandoned several purchase decisions in recent months as they were bombarded by offers. Nearly 40% of the people surveyed felt that too much choice had made things tougher, 28% did not see any change while 33% were positive it took less time and effort. Most plan to retail AI for better decisions
