>> Easier listing rules coming for desi startups
>> Analysts say more steam left in midcaps, smallcaps
>> Withholding tax of FPI debt exposure restored
AND
>> Mutual Funds steer clear of AT1 bonds after new Sebi rule
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 may be headed for some more selloff amid a major spike on Covid-19 cases in the country and weak global cues. Other Asian market opened mostly weaker after setbacks to the recovery from the pandemic weighed on US equities and oil, and drove safe haven trades into Treasuries and the dollar. Major Wall Street indices shed weight overnight. US bond yields held a decline after sliding for a second day. The US dollar rose against a basket of major currencies. Crude oil stabilized below $60 a barrel as renewed lockdowns in Europe clouded the prospects for a speedy recovery in consumption
That said, here’s what else is making news.
India is set to ease rules to encourage startups to go public and list on the so-called Innovators’ Growth Platform, providing a structured exit route for early-stage investors in new enterprises. Markets regulator Sebi is also likely to alter delisting rules for existing companies to bolster corporate governance. In its board meeting on Thursday, Sebi might also endorse a bigger role for independent directors in the delisting of companies, seeking to reduce the timeline and improving disclosure standards.
Mid- and small-cap stocks have already outperformed blue chips in the past one year. But analysts say there is more steam left in the rally. “When there is a broader rally in the market, mid- and small-caps tend to do better than largecaps. That is very much possible going forward,” said Hemang Jani, head of equity strategy broking and distribution at Motilal Oswal. “There can be outperformance in the broader market if economic revival continues,” said another analyst.
Mutual funds, which have been major buyers of perpetual bonds, could stay away from buying new issuances or existing papers that would have a Call maturity beyond March 2023 after Sebi’s revised guidelines left a gap between the suggested and market valuations of these instruments. About Rs 373 crore of Union Bank of India perpetual bonds changed hands on Tuesday in an unusually high volume for a single transaction. One of the top mutual funds with large exposure is said to have sold those papers, for which “call option” is coming up in April. An industry leader said new perpetual bond issues will have to seek a new set of buyers, as mutual funds may stay away from additional purchases of AT1 bonds after these guidelines.
Banks may see bad loans rise by Rs 1.3 lakh crore and face an outgo of Rs 7,000-9,000 crore as reimbursement of interest on interest to those with loans outstanding during the moratorium period. The Supreme Court on Tuesday said it would not interfere in the classification of non-performing assets, but directed lenders to waive interest on interest for all borrowers. Earlier, the government had reimbursed interest on interest dues to those who had loans outstanding below Rs 2 crore.
LASTLY…
India is believed to have challenged in a court in The Hague an arbitration tribunal verdict that overturned its demand for Rs 10,247 crore in back taxes from Cairn Energy Plc — the second time in three months that it has refused to accept an international award against retrospective tax. The appeal was filed on Monday, a source with knowledge of the matter said. A Finance Ministry spokesperson did not immediately respond to an e-mail sent for comments.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
The Adani Group inched closer to taking control of Visakhapatnam-based Gangavaram Port, with Adani Port and SEZ inking an agreement with the private port’s promoters to acquire their 58.1% stake for Rs 3,604 crore.
Airtel Africa has sold its tower units in Madagascar and Malawi to Helios Towers Plc for around $108 million and inked separate pacts with the UK telecoms infrastructure firm for potential sale of its tower assets in Chad and Gabon by end-FY22.
Tata Motors’ luxury car unit Jaguar Land Rover plans to launch 10 models in India in the next fiscal year, including electrified vehicles, with an eye on registering double-digit growth after a year of low sales due to the impact of the Covid-19 pandemic.
Hero MotoCorp, India’s largest two-wheeler manufacturer, will increase prices next month to offset the impact of rising input costs.
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!
