Piggy Weekly Report 25/2/19

“You’ve got to tell your money what to do or it will leave.”

– Dave Ramsey
American radio show host and businessman

Market earlier this week, specifically on the first two days, closed on the lower levels but managed to bounce back and close at higher levels in the next two days, while it closed flat on the last day of the week. The foreign institutions investors (FIIs) bought equities worth Rs 5,026.41 crores, while domestic institutions investors (DIIs) bought Rs 4,654.84 crore worth of equities in last week. Sensex rose 0.17 percent or 62.53 points, to end at 35,871.48, while Nifty gained 0.62 percent, or 67.3 points, to close at 10,791.65. The Indian Rupee (INR), registered a marginal change as it ended at 71.14 on February 22.

Key Updates for the week

• The finance ministry announced, that it would infuse Rs 48,239 crore in 12 public sector banks (PSBs) in this fiscal to help them maintain regulatory capital requirements and help finance their growth plans. With this latest capital infusion, the total amount of capital infusion would increase to Rs 1,00,958 crore, of the planned recapitalization of Rs 1.06 lakh crore for PSBs for the current fiscal. The remaining Rs 5,000 crore capital infusion would be used as buffer for any contingency or growth capital required by Bank of Baroda, which is in the process of merging with Dena Bank and Vijaya Bank. The recapitalization of weak banks is expected to boost credit growth, especially to small businesses, as well as help PSU banks meet capital requirements. It is also aimed at helping them come out of Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework.
• The Reserve Bank of India (RBI) announced the payment of Rs 28,000 crore as interim dividend to the government, which has been looking for resources to roll out populist schemes ahead of general elections. The RBI has in the past transferred its surplus profit or dividend to the government in August every year, including in election years in 2009 and 2014, as the RBI follows July to June year. This is the second straight year that the RBI has announced an advance payment to the government. Last year, it paid Rs 10,000 crore in the interim dividend in March and a final dividend of another Rs 40,000 crore in August. Payment of interim dividend was one of the contentious issues between the government and the RBI under the previous Governor, Urjit Patel.
• The Supreme Court found billionaire Anil Ambani guilty of contempt for failing to pay dues on time, as ordered by the court to Swedish telecom equipment maker, Ericsson AB. In case, Anil Ambani misses the payment deadline again, Ambani will be sent to jail for three months. The Supreme Court has directed Anil Ambani to clear his dues within 4 weeks. Reliance Communications sought urgent approval from its lenders for release of about Rs 260 crore lying in its bank account, in order to clear the dues of Swedish telecom gear maker. Reliance Communications is confident ofraising the remaining about Rs 200 crore for payment to Ericsson, in order to ensure that the entire amount gets paid well within the four weeks’ timeline set by the Supreme Court.

HRITHIK Performance

• HRITHIK stocks stands for HDFC Bank, Reliance Industries, Infosys, Tata Consultancy Services, Hindustan Unilever Limited, IndusInd Bank and Kotak Mahindra Bank. HRITHIK stocks have an enormous impact in the Indian market and possess a combined market capitalization that is bigger than the size of most national economies.
• HRITHIK stocks are considered the FAANG of India. FAANG stands for stocks of Facebook, Apple, Amazon, Netflix and Google. This term was coined by CNBC Analyst Jim Cramer, to highlight that these 5 stocks have enormous impact as a collective group.