Markets This Week
Following last week’s closing, the Indian equity markets tumbled on Monday and Tuesday. To reclaim the previous week’s closing levels it took the markets three days of hearty trading spiked by good investment news. After three straight days of rallying, the 30 share benchmark BSE Sensex closed the week ending 31 July at 28114.56 points – an increase of only 2.25 points or 0.008 percent over the previous week’s closing at 28112.31. On Friday, the last day of trade this week, the Sensex gained 409.21 points or 1.48 percent.
The other major index, the 50 share Nifty closed the week at 8,532.85 points – up a mere 19.35 points or 0.22 percent from last week’s closing at 8,513.50 points. In the week to come, the focus will remain firmly on corporate earnings from major companies including Mahindra & Mahindra, Hero Motor, and Tata Motors, and the RBI monetary review meet. Top gainers at the Sensex were DLF, Cipla, ITC, SBI, and Maruti Suzuki while top losers include Tata Steel, Tata Power, Hindalco and ONGC. Experts suggest caution but most researchers are confident that the second quarter shall be a good one for most business houses. Retail investors are advised to research before investing and to look at longer terms for good returns. Low prices at the bullion market predict an increase in gold sales in the month to come.
Corporate Earnings – ICICI, ITC, Kotak Mahindra, L&T Post Results
India’s largest private sector lender in terms of assets, ICICI Bank declared its Q1 results this week. The 12 percent rise in profits cheered investors as the bank’s shares went up by 5 percent on Friday. ICICI bank reported a net profit of INR 2,976.16 crore for the quarter.
FMCG major, ITC too declared Q1 results. The profit of ITC grew by 3.6 percent YOY to INR 2,265 crore. Overall revenue, however, recorded a downslide of 7.1 percent over last year, same quarter to INR 8,588 crore.
Kotak Mahindra Bank reported a 56 percent decline in its net profit for the first quarter of this fiscal year. Q1 net profit was pegged at INR 189 crore. Larsen & Toubro (L&T) posted a net profit of INR 606.2 crore, a decline of 37.3 percent YOY.
Uber Technologies Inc Set to Invest USD 1bn in India
Based on the wild popularity of its taxi hailing mobile application, Uber Technologies has decided to invest about USD 1 billion in India over the next nine months. This investment is likely to go towards expansion into newer cities, and into improving the technology. The top 5 cities that Uber caters to already account for 80 percent of the business and smaller cities are showing a great appetite for Uber’s services. Uber may also look into developing new India-centric products. Uber India head, Amit Jain said, “Uber has grown exponentially in India, a global priority market for us, which has also quickly become the largest market geographically for Uber outside the US”. Uber operates in over 57 different countries, but it has become obvious that despite its early hiccups, India shall remain an important geography in its future plans.
Tata is India’s Most Valuable Brand – Brand Finance
According to Brand Finance India 100, the top ten brands of India are – Tata, SBI, LIC, Airtel, Reliance, Indian Oil, Infosys, L&T, HCL, and ONGC. The Tata Group was named the most-valuable brand in the nation, valued at over USD 15 billion. Other brands in the top 100 Indian list include Flipkart, Micromax, Sun Pharma, and Royal Enfield. Across the world, Tata Group was ranked 65th among global corporations in terms of its brand valuation. The growth in brand value has been slow this year, said Brand Finance. The increase has been pegged at 4 percent.
According to Brand Finance, a number of new brands have climbed into the top 100 slots in India. Banks, e-commerce companies, technology firms, and telecommunications companies vie for a position among the top 100 in India. Some 20 percent of the brands in the top 100 are new entrants. India is doing extremely well and may soon become the home to a number of brand powerhouses. Globally speaking, though, Tata Group has outdone its nearest Indian competitor SBI by a considerable margin. It has retained its position among the best in the world by continuing to invest in quality output, research, technology, advertising, and a robust brand strategy.
BNP Paribas Acquires Sharekhan
French banking major BNP Paribas is in the final leg of acquiring India’s online share broking company Sharekhan. The INR 2,200 crore deal has been signed, said news reports this week. Sharekhan has some 12 lakh customers and specialises in retail equity broking. The India chief of the bank, Joris Dierckx said, “The purchase of Sharekhan is a unique opportunity for us to build on our achievements in the Indian market and to further expand our business in India”. Apart from Sharekhan, the French bank also holds a significant stake in Geojit BNP Paribas Financial Services based in Kerala.
BNP Paribas is also currently in the news for having bounced back into profits from previous quarterly losses following a multibillion dollar fine it had incurred. On Friday the bank declared a net profit of about Euro 2.56 billion.
Government Plans INR 70000 cr Capital Infusion into PSU
This week, the government of India announced plans for an infusion of INR 70000 crores into public sector banks including ailing bank. This fiscal year alone, the government plans to pump in INR 25000 crore as part of its bank recapitalisation venture. A further infusion of INR 25000 crore is planned for FY 17 and about INR 10000 crore in the two subsequent years. The Indian equity markets responded favorably to the news and SBI shares soared over 4 percent. SBI, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, and IDBI Bank are likely to get about 40 percent of the total infusion planned for this year.