Notwithstanding escalating pressure from world leaders, India looks to double Russian oil imports. Most of the PSU refiners are keen to reduce their cost with the heavily discounted crude from Russia. In fact, the PSUs are looking to secure 6-month long-term contracts with Russia, especially from Rosneft. This will be over and above the shipments that India is already buying from Russia, with their share already up at 25% of India’s crude basket in June 2022. Russian oil arrivals into India are up over 20-fold on a yoy basis.
LIC hardly had the fairy tale debut that it was looking for . In fact, on 06th June, the LIC stock hit its lowest level of Rs786 as selling continued to plague the stock. Its market cap also fell below the Rs5 trillion mark. Ironically, the other large company that listed at the same time, Delhivery, has done fairly well in terms of post listing performance. LIC is now over 17% below its issue price of Rs949. Many of the brokers are starting to initiate buy reports on LIC due to its elevated embedded value, but investors are not too keen.
The benchmark 10-year bond yield rose to a 39-month high of 7.5% anticipating a 50 basis rate hike in the June policy announcement on 08th June. The spurt in the bond yields came after surveys hinted at RBI also raising its inflation forecast for FY23 by 80 bps to 6.50%. The last time bond yields had traded above 7.5% was in mid-March 2019. Apart from global hawkishness, the India rupee has also inched much closer to the 78/$ mark in the last few days, while Brent Crude has crossed above $120/bbl on supply concerns.
Most cement companies extended losses after the announcement of expansion by Ultratech. Cement companies are already caught amidst rising cost of inputs, power and freight. In between, the supply glut would only diminish their pricing power further. Among the stocks to touch 52-week lows were Shree Cement, Grasim Industries, Birla Corp, Dalmia Bharat, Ultratech, and JK Cements. Ultratech laid out plans to invest Rs12,886 crore to enhance capacity to 159.25 MTPA, after the mega Adani-ACC-Ambuja deal.
In the midst of the market volatility, Oil India surged 5% to Rs262 as Brent crude oil prices spiked sharply on the back of Saudi Arabia hiking prices for its crude sales in July, especially to Asian customers. The stock had recently touched a yearly high of Rs267.70 and has been a major outperformer. Like ONGC, even Oil India saw a sharp improvement in the realization per barrel. However, unlike ONGC, the advantage is that Oil India does not have to worry about legacy wells, windfall tax and cash flow pressure on balance sheet.
With the front running allegations in the case of Axis Mutual Fund, the market watchdog, SEBI, has been getting a lot more vigilant and tightening the screws. Here it was a case of the dealers having knowledge of trades of the organization and taking front positions ahead of that. Now SEBI wants external monitor for dealing activities with concurrent audit. It is also looking at the process flow from order flow to the execution stage in closer detail. One of the tests could be the best price test, but idea is to tighten norms.
Hyderabad-based Cyient, will acquire Celfinet, which is a Portugal-based wireless engineering service provider. The consideration for the deal will be Rs340 crore. It will help Cyient expand its presence in the EU region as well as in North America and in Australia. Celfinet provides solutions for communication service providers (CSPs) to build intelligent infrastructure and smart operations. It will also create a chip that will be called the Koala NB-IoT system-on-chip (SoC). It will help power high-end IOT devices in India.
There is good news on the IT front as TCS expects the rate of staff attrition to fall sharply as demand for its services rise. TCS also expects more of entry level tech talent to enter the job market as well as lateral moves from start-ups, which are in the midst of laying off staff. For the Q4FY22, TCS saw staff attrition rise to 17.4%, a hitherto unheard level at TCS. Meanwhile, TCS is also looking to tap the large pool of tech talent in a more organized manner. TCS is also spending big money on training fresh tech talent in India.