In the June trade data announced by the Ministry of Commerce, the exports were marginally up but touched a 7-month low at $35.2 billion on global bottlenecks and weak demand. Merchandise imports were up 4.9% at $56.2 billion resulting in the trade deficit narrowing to $20.98 billion for June 2024. There was a surge in the inbound shipments of petroleum products, electronic goods, and metals. However, the services surplus continued to remain at attractive levels, leading to a sobering impact on overall deficit.
Temasek of Singapore will invest a sum of $10 billion (Rs86,000 crore) into India over the next 3 years and that is a substantial amount of money coming from one of the most respected long-only funds in the world. That will take the exposure of Temasek in India from $37 billion to $47 billion. Temasek has its indirect investment in Bharti Airtel as one of its key investments in India, but has also been an investor in several start-ups. In 2023, Temasek invested $3 billion into India, including $2 billion in Manipal Hospitals.
Gold prices approached a one-month peak as the prospects of Fed cutting rates in September became brighter with the sharp fall in US consumer inflation by 30 bps at 3.0% for June 2024. Gold touched a high of $2,421/oz on a closing basis, largely on the strength of safe haven buying by central banks amidst the growing uncertainty in the value of the dollar and the need to diversify currency of central bank reserve holdings. With China’s GDP growth missing Reuters estimates by 40 bps, gold could be the real in-thing.
The new modified norms for inclusion of stocks in the F&O list could take the actual number of F&O stocks to 191. Due to the new norms, there will be 26 exits and 35 new entrants resulting in net accretion of 9 stocks in the F&O list. This is the first revision in the F&O list since 2018. The criteria for entry is based on the average volumes of the stock over a 6-month period while the criteria for exit will be based on average volumes over a 3-month period. This avoids the risk of abrupt exits and also cuts chances of manipulation.
It is happy times for India electronic exports with Apple reporting 35% growth in India sales at Rs67,000 crore for the just concluded FY24. The official filing with the ROC is still awaited. In FY22 and FY23, Apple had reported India sales of Rs49,332 crore and Rs33,381 crore respectively. In FY23, Apple India had also achieved doubling of net profits at Rs2,230 crore. However, India still accounts for just 1.5% of the global sales of Apple as of FY23. India accounts for 14% of Apple iPhone production value; to rise to 25% by FY26.
With the strength of the BJP in the Rajya Sabha falling to 86, the concern is if it could impact the passage of any of the key bills in the Upper House? The NDA may have to rely on the non-NDA friends like AIADMK and the YSR Congress to get through. BJD may not support the ruling BJP after the recent performance in Odisha. This issue was caused by 4 member of the BJP in the Rajya Sabha resigning on completion of their term. The NDA strength at 101 still falls short of the 113 needed for majority, but no problems are seen.
Hindustan Unilever has announced the sale of its water purification business to A.O. Smith, one of the world leaders in the water purification business. The PUREIT business of HUL obviously did not fit into their larger scheme of things. HUL was of the view that A.O. Smith would be in a better position to scale up and focus on the water purification business. Incidentally, PUREIT has a large number of loyal clients which is likely to benefit A.O. Smith in a big way. The deal is expected to be concluded by the end of 2024.
The Indian government is likely to chip in with more aid for the Indian semiconductor segment. Currently, Rs70,000 crore has already been committed as support to the chip industry, but with more than 300 suppliers needed for this business, the government is looking to expand its incentives program. India is not only looking at becoming a hub for manufacture and export of semiconductors (a business that is now dominated by Taiwan), but India is also planning that as a route to achieve self-sufficiency for local needs.