· FIIs increasingly vetoing CEO pay hike plans
· Fed says not the time to talk tapering now
· CDS signals lot of uncertainty over bank health
· Sebi links fund managers’ pay to fund performance
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.
Let’s start with a quick glance on the state of the markets.
Dalal Street looked headed for a solid gap-up start as Nifty futures on Singapore Exchange traded nearly 165 points higher earlier today. Asian stocks traded steady after US President Joe Biden laid out a $1.8 trillion social-support plan. Wall Street ended lower overnight after the US Fed held interest rates and its monthly bond-buying program steady. US Treasury yields fell, while the dollar was on the defensive near nine-week lows. Crude oil fluctuated after gaining on a confident demand outlook from Opec+
That said, here’s what else is making news.
Investors have received some reassurance that the US Fed will not imminently reduce its support of the US economic recovery, but they expect the Fed to provide more concrete clues on a tapering of bond purchases in the months ahead. Though Wednesday’s comments were largely anticipated, investor fears that strong US economic data would force the Fed to taper its debt purchases sooner than expected. The US central bank on Wednesday took a rosier view of the economic recovery, but said it was too early to consider rolling back its emergency support with so many workers still left jobless by the pandemic.
So, tapering fears are in a kind of suspended animation now
The cost to insure against a potential default by Indian banks has risen about a fifth in the past two weeks as various states imposed local curbs on mobility and businesses. Credit default swaps, an insurance against default, tied to ICICI Bank and SBI are now at levels last seen during the peak of the first wave of coronavirus. The CDS rates seem to discount the market-beating earnings of private lenders for the fourth quarter.
It simply shows the deep uncertainty looming over the financial sector in view of the Covid 2.0 spread.
Institutional investors seem to be taking an increasingly cautious view of chief executive compensation. In the past four weeks, institutional investors in companies such as Nippon Life India AMC, La Opala RG, InterGlobe Aviation, Varun Beverages and Sundram Fasteners have voted against resolutions on executive pay. About 83% of the institutional investors in Nippon Life India AMC have voted against a resolution that proposed to change the remuneration of Executive Director & CEO Sundeep Sikka. They all have voted in favour of five other resolutions, including appointment of independent directors.
Markets regulator Sebi on Wednesday said that each fund house should pay at least 20% of salary, perks, non-cash compensation net of income-tax, NPS, PPF, to their top executives in units of the MF schemes they’re working for. These executives include the fund house’s managing director/chief executive officer, chief investment officer, chief operating officer, fund managers, research analysts and some others who are directly involved in running each scheme. This rule will be effective July 1, 2021,
Food delivery platform Zomato on Tuesday filed a draft red herring prospectus with markets regulator Sebi for an IPO to raise $1.1 billion or about Rs 8,200 crore. This would be one of the first major IPOs from the new generation of Indian internet startups. According to the filings, Zomato may also consider raising $200 million (about Rs 1,500 crore ) more in a pre-IPO round.
And lastly, the Asian Development Bank says India’s GDP should rebound strongly by 11% in 2021-22 due to continued economic recovery boosted by increased public investment, vaccine rollout and a surge in domestic demand. But it cautioned that the surge in Covid cases could hurt the recovery. The ADB forecast assumes that vaccines are deployed extensively across the country and the second wave of Covid is contained quickly.
NOW Before I go, here is a look at some of the stocks buzzing this morning.
Bharti Airtel’s India CEO Gopal Vittal said the company invested Rs 38,000 crore in spectrum and network capacity to ensure its customers remain connected during this pandemic.
Maruti Suzuki on Wednesday said it is advancing the maintenance shutdown across its manufacturing facilities to May 1 from June to make oxygen available for medical needs.
Markets regulator Sebi on Wednesday penalised edtech company Aptech Rs 1 crore for non-disclosure of price sensitive information in a case dating back to mid-2016.
IndiGrid Trust obtained more than double the quantum of debt on offer at its maiden public bond sale that opened for subscription Wednesday.
ONGC says it is eyeing foreign partnerships for prospecting in less explored acreages, and critical issues needed to be addressed before looking at changing the company’s structure as suggested by oil ministry.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!
