Tuesday, 29th March 2022

Brent Crude fell by more than $8/bbl to $112/bbl on fears of a hard landing by China. Over the weekend, China had announced major lockdown efforts in the financial hub of Shanghai to curb the surge in COVID-19 cases. Shanghai has imposed a 2-stage lockdown of nearly 2.6 crore persons. Oil fell on fears that this could lead to large scale demand destruction. It is also likely to impact Chinese oil import volumes. The US is, meanwhile, considering another round of release of oil from its Strategic Petroleum Reserve (SPR).

As Ruchi Soya FPO closed on 28th March, the HNI portion and the QIB portion got oversubscribed while the retail portion saw tepid demand getting just 90% of its intended issue size. SEBI has directed Ruchi Soya to give investors the option to withdraw their bids due to circulation of unsolicited SMS messages advertising the issue. The overall FPO got subscribed 3.6 times but the retail portion lagged. This casts doubts over the FPO. In 2021, Baba Ramdev had urged followers to buy Ruchi Soya to become Crorepati.

One of India’s most respected retail jewellery chain, Joyalukkas India Ltd, filed preliminary papers with SEBI to raise Rs.2,300 crore via the IPO route. Out of the fresh issue component, Joyalukkas plans to use Rs.1,400 crore for the repayment of debt and another Rs.464 crore for financing the opening of eight new showrooms. Currently, more than 90% of its revenues comes from the Southern region followed by the Western region. For FY21, Joyalukkas reported a 11-fold growth in net profits yoy at Rs.471.75 crore.

In a dramatic move, the Singapore-based ecommerce portal, Shopee, has decided to exit India in toto. This is amidst growing pressure from traders. However, Shopee has clarified that this decision had nothing to do with the ban on its popular game. The parent company SEA Ltd faced a tough time after the Indian state had banned “Garena Free Fire” along with 53 other Chinese apps. Shopee has already been accused of Predatory pricing by the CAIT. Shopee has heavy investments from Tencent, a Chinese digital play.

If you thought that imported coal was getting too expensive, there is bad news. ICRA has pointed out that the price of imported coal was all set to rise 45-55% in the first quarter of FY23. It has been a mix of supply disruption as high levels of inventory stocking demand from power units. With most Western nations putting an embargo on Russian coal imports, there is likely to be a severe shortage of coal in the global market. The coal price spike has to happen as it would be hard to offset the impact of the Russian shortfall.

Even as treasuries slumped in the US markets, the US markets are seeing the first case of yield curve inversion in the last 16 years. The inverted yield curve is also indicative of the fact that the Fed rate hikes may happen much faster than expected. In early March, the US Fed had hiked Fed rates by 25 bps with promise to hike rates in each of the remaining 6 Fed meets in this year. US bond yields have already shot up sharply and at this rate, the RBI may have to shift its monetary stance from accommodative to neutral.

The UAE retail giant, Lulu Group, plans to invest Rs.3,500 crore in Tamil Nadu to set up shopping malls, hypermarkets and a food-logistic parks. The MOU has been signed between the state of Tamil Nadu and the Lulu Group. As per the MOU, the first shopping mall will come up in Chennai by 2024 and the first hypermarket is expected to open in 2022 itself. Currently, Lulu group operates 225 hypermarkets and malls in Middle East, Egypt, Indonesia, Malaysia and India. It employs 57,000 people across the world. 

ONGC Videsh, the international arm of ONGC Ltd, has sold at least one cargo of Russian Sokol oil to India refiners like HPCL and BPCL. The oil sale tender failed to elicit any interest from other global buyers. India has been aggressively buying new oil from Russia at a steep discount of 20% to 25%, despite the pressure from the US and UK due to sanctions. Even in the previous tender, ONGC Videsh did not elicit any response from buyers. ONGC Videsh will look to selling more cargos to Indian refiners amidst weak global demand.

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