It is election results time as the world’s largest democracy goes to the last leg of the electoral process. While the final counts will be known by the end of the day, the credible trends should be in by mid-day. The exit poll has already prophesied a strong wave in favour of the ruling NDA for the third time in a row and it remains to be seen what the actual outcome is. The stock market is awaiting for the official word on who will take the seat in Delhi since it has very strong implications for the reforms process and for growth.
In the first four months of 2024, India more silver than the whole of 2023. This is largely on the back of strong industrial demand for silver. Against the total silver imports of 3,625 tonnes in 2023, India has done imports of 4,172 tonnes up to the end of April 2024. The spike in silver demand has come from the solar and renewable energy segments. There has also been speculative interest in silver as traders expect silver to outperform gold in the medium term. Bulk of the silver imports come from UAE to leverage on CEPA.
Crude oil prices extended losses on Monday, on a day when the Nifty and the Sensex touched new highs on the back of the exit poll projections. For the first time since early February 2024, the price of Brent Crude closed below $80/bbl on fears that oil supplies would surge later in the year. The OPEC Plus agreed to continue the supply cuts but made a provision for restoration of supplies post October so that the OPEC members do not miss out on the rally in prices. Recent weeks have seen inventory surplus in the US oil.
Muthoot Finance is planning to diversify from its traditional reliance on gold and make gold less than 80% of their revenue mix in the next 3-5 years. The gold loan business has been lucrative with margins at 10% levels as the gold loan companies largely operate on the spread between their borrowing cost and lending costs, backed by real gold. The other non-gold vertical that Muthoot Finance is planning to increase its exposure include vehicle loans, personal loans, small business loans and housing loans; that is 15% today.
The capex (capital expenditure) of central public sector enterprises (CPSEs) was up 6.5% in April 2024 at Rs50,206 crore; largely led by NHAI, IOCL and the Indian Railways. This is despite the fact that the growth in capital spending in FY25 has been cut from 30% to 11.1%. Indian Railways has been investing heavily in expanding its capacity and in safety measures; apart from introduction of high-speed trains. Capex of other players like ONGC and NTPC was smaller. The combined investment target for FY25 is Rs7.8 trillion.
Baron Capital has upped the valuation of Swiggy to $15.1 billion, a 25% mark-up to its last valuation. Swiggy is among the top 10 holdings of Baron Capital, which also includes other marquee companies like Tencent, TSMC, Samsung Electronics and Alibaba group. In India, Baron Capital is also invested in Reliance Industries and Bharti Airtel among the listed stocks. To a large extent the Swiggy valuations upgrade has come from the frenetic spike in the stock market price of Zomato, which has rallied 3-fold in last one year.
A big export push may be top on the agenda of the Indian government as it would look to capitalize on the gains of the past few years. India plans to set up a dedicated overseas market development body, IndTrade, which will target $2 trillion in exports by year 2030. Apart from trade promotion, the body will also focus on selling the India brand globally. There will be large scale targeted campaigns and marketing efforts to push the idea of Made in India. That is a 4-fold growth from current levels of under $500 billion.
The minimum support price (MSP) for Kharif is likely to be upped by 5-10% this year. However, oilseeds and pulses may see higher increases in the MSP. The Kharif output includes paddy, pulses, oilseeds, and coarse cereals. MSP is the incentive for farmers to ensure they get market linked prices that cover their costs and also leave a margin. The government is also concerned that many farmers in Maharashtra have shifted from tur dal to soyabeans. The government has huge rice stocks, so diversification may be fine.