The ECB held its benchmark rate at 0% for the sixthtime on 20th October 2016 as was expected. Both the deposit rate and the lending rate were left steady at -0.4% and 0.25% respectively. ECB interest rates are expected to remain at present or lower levels for an extended period of time and ECB confirmed that the monthly asset purchases of 80 billion euros are intended to run until the end of March 2017, or beyond, if necessary.
The Chinese economy expanded 1.8% (Q-o-Q) in the third quarter of 2016, compared to an upwardly revised 1.9% growth in the previous three months and in line with estimates, economy grew 6.7% (Y-o-Y). GDP Growth Rate in China averaged 1.85% from 2010 until 2016, reaching an all-time high of 2.40% in the first quarter of 2011 and a record low of 1.20% in the first quarter of 2016. For 2016, the Chinese government is targeting the economy to grow between 6.5 to 7.0%. A year earlier, the economy grew by 6.9%, the weakest since 1990.
The Bank of Canada left its benchmark overnight rate unchanged at 0.5% at its October 2016 meeting as expected. The growth outlook is lower than projected due to slower housing resale activity and exports and that inflation remains below expectations. The Bank Rate was also left on hold at 0.75% and the deposit rate at 0.25%.
The Bank of Indonesia unexpectedly cut its key interest rate by 25 bps to 4.75% at its meeting on 20thOctober 2016. The central bank also lowered its lending facility rate by 25bps to 5.5% and reduced its overnight deposit facility rate by 25bps to 4.0%. Bank of Indonesia said that the unexpected rate cut decision aims to boost growth and lending in the nation.
Microsoft has reported Q1FY17 results, net profit is down by 14.48% (Y-o-Y). Microsoft’s cloud business, Azure revenue grew 116% (up 121% in constant currency) with Azure compute usage more than doubling year-over-year basis. Share price rose by 5% post announcement of results.
The Sensex and the Nifty rose by 1.46% and 1.28% in the last week.
Three wheeler auto segment has seen sharp growth of 13.4% in first half of FY17, whereas passenger vehicle has seen growth of 12.34%. The two top three-wheeler players in the country, Bajaj Auto and Piaggio Vehicles, are driving volumes in this segment. Bajaj has seen volumes grow 27 per cent to 149,587 units in H1. Bajaj, which is the biggest three-wheeler maker, has expanded its market share from about 47% in FY16 to 52% as of now.
Government has raised Rs.22000 million through NBCC offer for sale by disinvesting 15% stake in the company. NBCC’s offer for sale got 1.5 times oversubscribed at the end of share-sale period.
Wipro has agreed to buy Appirio, a US- based company which helps organisations migrate software applications to the cloud. For this acquisition Wipro is paying USD 500 million to buy Appirio.
Quess Corp has acquired 64% stake in Singapore based Comtel Solution for a consideration of SGD 27.52 Million, this deal will help Quess Corp to boost its operation in Asia Pacific market. Quess has also acquires two domestic firms Terrier Security Services and Simpliance Technologies. With these acquisition Quess Corp inorganic sales is expected to increase in future.
Reliance Industries Ltd (RIL) reported consolidated net profit down by 23% (Y-o-Y), on standalone basis net profit rose by 18.5% (Y-o-Y). Profit before depreciation, interest, and taxes (PBDIT) rose 24.8% (Y-o-Y). RIL’s revenue from the refining and marketing segment decreased by 0.4% to Rs 605270 million. RIL share price fell approximately 2.5% post announcement of results.
Biocon reported sales of Rs 9,920 million in the second quarter of FY17, up by 21.12%(Y-o-Y). The Small molecules vertical revenue grew by 17% (Y-o-Y) to Rs 4,034 million from Rs 3,446 million last year. The growth was led by a better product-mix of differentiated APIs and a higher contribution from statins. The Biologics continued to be a star performer which grew by 35% (Y-o-Y) to Rs 1,555 million from Rs 1157 million. Biocon share price rose by 2.31% post announcement of results.
SQS BFSI reported total income of Rs 685 million compared to Rs 668 million, up by 2.6% (Y-o-Y). Operating revenue was Rs 684 million compared to Rs 666 million, up by 2.7% (Y-o-Y). EBITDA Margin stood at 19.6% for Q2 FY17 compared to 21.6% in Q2 FY16. SQS BFSI share price fell by appx 7% post announcement of results.
Tata Coffee Ltd reported a fall in topline growth by 7.7% (Y-o-Y). Net profit rose by 62% (Y-o-Y), net profit rose despite fall in sales as total expenditure declined by 16%. Share price of Tata Coffee share price rose by approximately 2% post announcement of results.
RBL Bank reported net profit up by 34.3% (Y-o-Y). Net interest income shot up by 60% (Y-o-Y) with loan book up by 44% and deposits up by 38%. Provisions for bad loans spiked 122% (Y-o-Y) and 16.4% (Q-o-Q). Post announcement of result, share price rose by approximately 5%.
Yes Bank reported net profit up by 31.3% (Y-o-Y). Net interest income up by 31% (Y-o-Y) with loan book up by 37% and deposits up by 29%. Provisions for bad loan increased by 55.6% (Y-o-Y). Post announcement of result, share price rose by approximately 2%.
Quess Corp quarterly result in Q2 FY 17 has seen growth of almost 26% when compared with Q2 FY 16, which is in line with expectation. EBITDA Margin has improved by 96 bps when compared with same quarter last year. Post announcement of result, share price rose by 6%.
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Industry and Stock Specific trends
The sectoral indices closed in the positiveterritory last week. The S&P Bankex, PSU, IT and Oil &Gas indices gained by 4%, 1.85%, 1.94% and 0.48% respectively. The S&P IT and gained by 0.72% and 0.80%respectively in the last week.
Reliance Industries Ltd (RIL) has witnessed rise in turnover and open interest in the stock futures segment. RIL share price fell approximately 2.5% post announcement of results. The Nifty Index futures saw fall in open interest by 5.29% for the October series. There was a rise in open interest by 101% and 144% for the November and December series respectively.
Chinese yuan has declined 1% this month as expectations of a US rate rise fuelled a dollar rally and China’s central bank allowed its exchange rate to slip past 6.7, a level previously seen as its line in the sand. The currency is now just 1.3% off 6.83, the level at which China pegged the yuan after the 2008 global financial crisis.
The Australian dollar bounce backed 0.7% to USD 0.7666 on 20th October 2016 after a surprisingly negative jobs report. Australia shed a whopping 53,000 full-time jobs in September, although the unemployment rate held at a three-year low of 5.6 percent.
Indian Rupee depreciated by 0.07% against USD.