SBM Weekly

TOP STORIES OF THE WEEK

ECONOMIC NEWS:
India
  • The International Monetary Fund cut its estimate for India’s growth this year to 6.1% from 7% projected in July, calling on the country to use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence. The IMF said India’s economy is set to grow at 6.1% in 2019 and then will pick up to 7% in 2020. The IMF said in its latest World Economic Outlook that the downward revision reflected a weaker-than-expected outlook for domestic demand. Earlier, the World Bank slashed its economic growth forecast for India to 6% for the current fiscal year from its April projection of 7.5%, citing cyclical slowdown.
  • India has halved its poverty rate since the 1990s and achieved a 7-plus growth rate over the last 15 years, the World Bank said. India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods such as addressing climate change, the bank said ahead of the annual meeting between the World Bank and the International Monetary Fund.
  • India's exports contracted by 6.57% to US $26 billion in September mainly due to significant dip in shipments from key sectors such as petroleum, engineering, leather, chemicals, and gems & jewellery. Imports too declined by 13.85% to US $36.89 billion, narrowing trade deficit to US $10.86 billion in September, according to official data this week. Trade deficit in September last year stood at US $14.95 billion.
  • India’s coal minister Pralhad Joshi said the government will formulated policy to attract overseas investors in next two weeks.
  • India’s retail inflation surged to 14-month high of 3.99% in September from 3.21% in August, but core inflation eased for the month mainly due to rise in food prices. The WPI inflation rate, on the other hand, fell to a 39-month low of 0.33% from 1.08% over the same period.
  • Finance Minister NirmalaSitharaman said in an interview on Tuesday India wants to comply with global sanctions, including US sanctions on Venezuela and Russia, but also needs to maintain its own strength and strategic interests.
  • India’s passenger vehicle sales slumped 23.7% in September, the 11th straight month of declines, prompting an industry body to flag more job cuts if sales failed to pick up soon. Passenger vehicle sales dropped to 223,317 units in September, SIAM data showed, while passenger car sales dived 33.4% to 131,281 units.
  • The members of Reserve Bank's Monetary Policy Committee (MPC) was unanimous in their view that a deepening economic slowdown is a worrying factor and should be addressed by keeping interest rate low until economic activity in the country is reinvigorated and firmly placed on the path of recovery. This prompted RBI Governor Shaktikanta Das to state in his media conference after Oct 4 policy statement that the central bank would keep its policy stance “accommodative” stance as long as it is necessary to revive growth.
GLOBAL
  • The Monetary Authority of Singapore (MAS) as widely expected eased monetary policy for the first time in three years on Monday to counter the global slowdown hit hard by the escalating US-China trade war. MAS said it would “reduce slightly” the slope of the Singapore dollar’s policy band.
  • The British government is firm that the country will leave the European Union on October 31 despite a letter that Prime Minister Boris Johnson was forced by parliament to send to the bloc requesting a Brexit delay. The Brexit uncertainty swung wild past week between an orderly exit on October 31 with a deal that British Prime Minister Boris Johnson signed on Thursday and a delay after he was forced to ask for an extension late on Saturday. Johnson's defeat in the British parliament over the sequencing of the ratification of his deal exposed the prime minister to a law passed by those opposed to a no deal departure, demanding he request a delay until Jan. 31.
  • US and Chinese trade policymakers are working together to get the Phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday, adding he was prepared to travel to Beijing for more meetings if necessary
  • There’s an “uncomfortably high” chance that a recession could hit the global economy in the next 12-18 months — and policymakers may not be able to reverse that course, said Mark Zandi, chief economist of Moody’s Analytics. “I think risks are awfully high that if something doesn’t stick to script then we do have a recession,” said Zandi adding "Even if we don’t have a recession over the next 12-18 months, I think it’s pretty clear that we’re going to have a much weaker economy.”
  • China’s producer price index (PPI), considered a key barometer of corporate profitability, dropped 1.2% year-on-year in September, National Bureau of Statistics (NBS) data showed on Tuesday. That marked the steepest decline since July 2016. In contrast, China’s consumer prices rose at their fastest pace in almost six years; However, core retail inflation pressures remain modest, giving policymakers room to introduce measures to prop up demand.
  • China’s third-quarter economic growth slowed more than expected with GDP rising just 6% on year, its weakest pace in almost three decades as the bruising US trade war hit factory production, boosting the case for Beijing to roll out fresh support.
CORPORATE NEWS:
India
  • Mukesh Ambani-led Reliance Industries reported 18.3% jump in net profit to a record Rs 11,262 crore in the July-September period of the financial year 2019-2020 as against Rs 9,516 crore a year ago. Revenue from operations grew 4.2% to Rs 152,149 crore for the quarter ended 30 September, 2019 from Rs 146,018 crore for the same period last year, primarily on account of robust growth in retail and digital services business, which grew by 27% and 43%, respectively. For the quarter ended September 2019, the company's total revenue was Rs 163,854 crore ($23.1 billion), an increase of 4.8% as compared to Rs 156,291 crore in the corresponding period of the previous year.
  • The custodian of DHFL bonds said on Thursday it is taking the firm to bankruptcy court on behalf of certain debenture holders. The application was filed on Oct 16 in the Mumbai Debts Recovery Tribunal to claim Rs 268.61 billion.
  • Insurance Australia Group will sell its 26% stake in India’s SBI General Insurance for about $432.38 million to Premji Investment and a Warburg Pincus affiliate, as it trims overseas holdings to focus on its domestic market.
  • IT major Wipro reported a 35.82% YoY rise in consolidated net profit at Rs 2,561.30 crore for the September quarter compared with Rs 1,885.70 crore in the corresponding quarter last year. On a sequential basis, the profit was up 6.2%. Analysts had projected a profit of Rs 2,303 crore. The company has guided for IT services revenue of $2,065 million to $2,106 million for the December quarter. This translates to a sequential growth of 0.8% to 2.8%.
  • Consumer goods giant Hindustan Unilever (HUL) reported a 21.2% year-on-year growth in net profit to Rs 1,848 crore for the July-September quarter of current fiscal year ending March 2020. Growth was aided by lower corporation tax, which came into effect last month. HUL reported a volume growth of 5% in the quarter under review. Considering segment wise, its Home Care sector revenue surged 9.4% to Rs 3,371 crore on year as against Rs 3,080 crore in the same quarter last year. Beauty and Personal Care revenue grew 5.3% to Rs 4,543 crore in quarter ended September 2019 as compared to Rs 4,316 crore in the same quarter previous year.
GLOBAL
  • Huawei Technologies Co Ltd’s third-quarter revenue jumped 24%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business. Huawei’s revenues jumped 24.4% on-year to 610.8 billion yuan ($ 86.2 billion) and its profit margin increased 8.7%, it announced.
  • Goldman Sachs Group Inc missed Wall Street estimates for quarterly profit as it took heavy losses from high-profile investments in WeWork and Uber Technologies and faced up to a weakening global economy, a Reuters report said. The bank’s net earnings applicable to common shareholders fell 27% to $1.79 billion in the quarter ended Sep 30 from $2.45 billion a year ago. Total net revenue fell 6% to $8.32 billion. Earnings per share fell to $4.79 from $6.28 a year earlier.
  • Citigroup reported third-quarter earnings and revenue that topped projections as stronger-than-expected trading results made up for weaker lending margins. Citigroup Inc reported net income for the third quarter 2019 of $4.9 billion, or $2.07 per diluted share, on revenues of $18.6 billion. This compared to net income of $4.6 billion, or $1.73 per diluted share, on revenues of $18.4 billion for the third quarter 2018.
Macroeconomic
Indicators		 Latest Release Number Release Date Data For Previous Release Number Previous Release Date Data For
INDIA
CPI Inflation 3.99 14-Oct-19 Sep '2019 3.28 12-Sep-19 Aug '2019
Core CPI 4.20 14-Oct-19 Sep '2019 4.25 12-Sep-19 Aug '2019
IIP -1.10 11-Oct-19 Aug '2019 4.6 12-Sep-19 Jul '2019
IIP -1.10 11-Oct-19 Aug '2019 4.6 12-Sep-19 Jul '2019
GDP 5.00 30-Aug-19 Apr-Jun FY20 5.80 31-May-19 Jan-Mar FY19
Manufacturing PMI 51.4 1-Oct-19 Sep '2019 51.4 3-Sep-19 Aug '2019
Services PMI 48.7 4-Oct-19 Sep '2019 52.4 4-Sep-14 Aug '2019
Trade Deficit (USD Billion) -10.86 15-Oct-19 Sep '2019 -13.45 16-Sep-19 Aug '2019
Current Account Deficit (% of GDP) -14.3$ Bln (2% of GDP) 30-Sep-19 Apr-Jun FY20 -4.6$ Bln (0.7% of GDP) 28-Jun-19 Jan-Mar FY19
FDI inflow (USD Billion YTD) 16.329 5-Sep-19 Apr-Jun 2019 12.752 4-Aug-19 Apr-Jun 2018
FII/FPI Net Equity Investments (INR Cr Financial YTD) 62156 18-Oct-19 So far 2019 52230 11-Oct-19 So far 2019
FII/FPI Net Debt Investments (INR Cr Financial YTD) 28085 18-Oct-19 So far 2019 26721 11-Oct-19 So far 2019
Foreign Currency Reserves (USD Billion) 439.712 18-Oct-19 11-Oct-19 437.833 11-Oct-19 4-Oct-19
GLOBAL
US Non-Farm Payroll 136000 4-Oct-19 Sep '2019 130000 6-Sep-19 Aug '2019
US Unemployment Rate 3.50 4-Oct-19 Sep '2019 3.70 6-Sep-19 Aug '2019
US CPI 1.70 10-Oct-19 Sep '2019 1.70 9-Sep-19 Aug '2019
US GDP 2.00 26-Sep-19 Apr-Jun 2019 2.00 25-Aug-19 Jan-Apr 2019
EU CPI 1.00 18-Sep-18 Aug '2019 1.00 18-Aug-19 Jul '2019
EU GDP 0.20 6-Sep-19 Q2 2019 0.40 5-Aug-19 Q1 2019
China PMI 51.40 30-Sep-19 Sep '2019 50.40 1-Aug-19 Aug '2019
China GDP 1.50 17-Oct-19 Q3 2019 1.60 14-Jul-19 Q2 2019
Market Indices Latest Release Number Release Date Previous Release Number Previous Release Date Change
INDIA
S&P BSE Sensex 39298.38 18-Oct-19 38127.08 11-Oct-19 1171.30
Nifty 50 11661.85 18-Oct-19 11305.05 11-Oct-19 356.80
GLOBAL
S&P 500 2986.2000 18-Oct-19 2970.2700 11-Oct-19 15.9300
DJIA 26770.2000 18-Oct-19 26816.5900 11-Oct-19 -46.3900
Nikkei 225 22492.6800 18-Oct-19 21798.8691 11-Oct-19 693.8109
Hang Seng 26719.5800 18-Oct-19 26308.4400 11-Oct-19 411.1400
FTSE 100 7150.5700 18-Oct-19 7247.0800 11-Oct-19 -96.5100
Market Indicators Latest Release Number Release Date Previous Release Number Previous Release Date Change
RATES - INDIA
RBI Policy Repo Rate 5.15 4-Oct-19 5.40 7-Aug-19 -0.25
Overnight MIBOR 5.25 18-Oct-19 5.22 11-Oct-19 0.03
PSU CD 12 M 6.05 18-Oct-19 6.25 11-Oct-19 -0.20
Manufacturing CP 12 M 6.25 18-Oct-19 6.25 11-Oct-19 -0.40
5 Yr. Benchmark GSEC 6.5491 18-Oct-19 6.5839 11-Oct-19 -0.0348
10 Yr. Benchmark GSEC 6.5185 18-Oct-19 6.5076 11-Oct-19 0.0109
3 Yr. AAA Bond PSU 6.95 18-Oct-19 7.00 11-Oct-19 -0.05
5 Yr. AAA Bond PSU 7.13 18-Oct-19 7.20 11-Oct-19 -0.07
10 Yr. AAA Bond PSU 7.66 18-Oct-19 7.68 11-Oct-19 -0.02
RATES – GLOBAL
FED Fund Rate 2.00 19-Sep-19 2.25 1-Aug-19 -0.25
USD LIBOR 3M 1.95325 18-Oct-19 2.0009 11-Oct-19 -0.0476
USD LIBOR 6M 1.95175 18-Oct-19 1.9555 11-Oct-19 -0.0037
USD LIBOR 12M 1.98725 18-Oct-19 1.9756 11-Oct-19 0.0116
US Treasuries 2 Yr. 1.58 18-Oct-19 1.63 11-Oct-19 -0.0500
US Treasuries 10 Yr. 1.76 18-Oct-19 1.76 11-Oct-19 0.0000
COMMODITY & OTHER INDICATORS Latest Release Number Release Date Previous Release Number Previous Release Date Change
BRENT 59.29 18-Oct-19 60.51 11-Oct-19 -1.22
NYMEX Crude Oil 53.72 18-Oct-19 54.70 11-Oct-19 -0.98
Gold MCX Spot Price 38241 18-Oct-19 38154 11-Oct-19 87.00
Dollar Index 97.14 18-Oct-19 98.30 11-Oct-19 -1.16
UPCOMING EVENTS
Date Event
INDIA
Oct 21 Assembly Elections in Maharashtra
Oct 21-25 Sovereign Gold Bond subscription
Oct 22 RBI to auction 12 SDL worth Rs 14,657 cr
Oct 23 T-Bills Auction (91-, 182-, 364-day)
Oct 23 Reserve money, M3 data
Oct 24 Auction to convert 6.65%-2020, 7.80%-2020, 7.35%-2024, 6.97%-2026 gilts worth total Rs 20,000 cr to 6.45%-2029
Oct 25 FX reserve
Oct 25 Bank deposit, credit growth
UPCOMING EVENTS
Day/Time Country Event
GLOBAL EVENTS
Monday
04:30 am UK Rightmove House Price Index
05:20 am Japan Trade Balance
07:00 am China Housing price index (Sep)
07:00 am China PBoC Interest Rate Decision
10:00 am Japan All Industry Activity Index
11:30 am EU Producer Price Index
03:30 pm EU German Buba Monthly Report
Tuesday
01:30 pm EU Bank lending survey (BLS) for the euro area
02:00 pm UK Public sector Net Borrowing (Sep)
03:30 pm UK CBI Industrial Trends Survey
06:00 pm UK Retail Sales
07:30 pm US Existing Home Sales
07:30 pm US Richmond Fed Manufacturing Index
08:00 pm UK Bank of Canada Business Outlook Survey
Wednesday
03:00 am US API’s Weekly Statistical Bulletin
05:20 am Japan Corporate Service Price Index
15:15 pm EU Business Climate
05:30 pm UK BBA Mortgage Approvals
07:30 pm EU Wholesale Sales
07:30 pm US Housing Price Index
08:00 pm UK EIA Crude Oil Stocks Change
Thursday
03:00 am Australia Manufacturing Purchasing Managers Index
06:00 am Japan Jibun Bank Manufacturing PMI
10:30 am Japan Leading Economic Index
10:30 am Japan Coincident Index
12:30 pm Spain Unemployment Survey
01:45 pm France Manufacturing Purchasing Managers Index
02:00 pm Germany PMI monthly Composite Reports on Manufacturing and Services
02:30 pm EU PMI service
05:15 pm EU ECB Interest Rate Decision
06:00 pm EU ECB´s economic policy decision
07:00 pm US Counting Jobless Claims
07:00 pm US Nondefense Capital Goods Orders Excluding Aircraft
07:15 pm US Manufacturing Purchasing Managers Index
07:30 pm US Number of New Home Sales
08:00 pm US EIA (Energy Information Administration) monthly survey data and AGA (The American Gas Association)
08:30 pm US Kansas Fed manufacturing activity
Friday
05:20 am Japan Foreign Investment in Japan stocks
05:20 am Japan Foreign Bond investment
11:30 am EU Business Climate
05:30 pm Germany GfK Consumer Confidence
12:15 pm France Producer Price Index
01:30 pm Italy Housing Price Index
01:30 pm Germany IFO Expectations, Current assessment and Business Climate
03:30 pm UK CBI Distributive Trades Survey
07:30 pm US Michigan Consumer Sentiment Index
10:30 pm US Baker Hughes US oil rig count

Issue 1 - For week ended 18 October 2019

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