Thursday, December 29, 2022
Lotus Chocolate Shares Rise 5% After Reliance's Majority Stake Buy News
Shares of Lotus Chocolate Co rose 5 per cent on Friday, a day after a unit of Reliance Retail Ventures agreed to buy a majority stake in the Indian chocolate maker for 740 million rupees ($8.94 million).
Reliance Consumer Products Limited (RCPL), the fast-moving consumer goods arm of Reliance Retail, will acquire a 51 per cent stake from promoters at Rs 113 a share and will also subscribe to some non-noncumulative redeemable preference shares.
RCPL would also make an open offer to acquire 26 per cent from public shareholders of Lotus.
The per-share value represents a discount of 3.5 per cent to Thursday's closing price of Rs 117.10.
The stock hit an upper circuit for a fifth straight session on Friday, having gained 27.5 per cent so far this week.
Reliance Industries, led by Indian billionaire Mukesh Ambani, has diversified from its mainstay oil-to-chemical business with a strong focus on retail and telecom.
Reliance Retail, currently India's biggest retailer, had this year set out plans to acquire dozens of small grocery and non-food brands, as it aims to build its own $6.5 billion consumer goods business to challenge foreign giants like Unilever and Nestle.
Shares of Lotus, which began operations in 1992 and makes chocolates, cocoa products and cocoa derivatives, are up 5.7 per cent so far this year.
($1 = 82.7580 Indian rupees)
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Lotus Chocolate Shares Rise 5% After Reliance's Majority Stake Buy News
Shares of Lotus Chocolate Co rose 5 per cent on Friday, a day after a unit of Reliance Retail Ventures agreed to buy a majority stake in the Indian chocolate maker for 740 million rupees ($8.94 million).
Reliance Consumer Products Limited (RCPL), the fast-moving consumer goods arm of Reliance Retail, will acquire a 51 per cent stake from promoters at Rs 113 a share and will also subscribe to some non-noncumulative redeemable preference shares.
RCPL would also make an open offer to acquire 26 per cent from public shareholders of Lotus.
The per-share value represents a discount of 3.5 per cent to Thursday's closing price of Rs 117.10.
The stock hit an upper circuit for a fifth straight session on Friday, having gained 27.5 per cent so far this week.
Reliance Industries, led by Indian billionaire Mukesh Ambani, has diversified from its mainstay oil-to-chemical business with a strong focus on retail and telecom.
Reliance Retail, currently India's biggest retailer, had this year set out plans to acquire dozens of small grocery and non-food brands, as it aims to build its own $6.5 billion consumer goods business to challenge foreign giants like Unilever and Nestle.
Shares of Lotus, which began operations in 1992 and makes chocolates, cocoa products and cocoa derivatives, are up 5.7 per cent so far this year.
($1 = 82.7580 Indian rupees)
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Sensex Rises 122 Points, Extending Gains For Second Straight Day
Indian equity benchmarks rose on the last trading day of a dismal year for financial markets that has caused equities and bonds to have their worst yearly performance in more a decade.
Despite dollar-demand pressure from oil importers, the rupee gained slightly against a steady dollar on the the last day of the year, quarter and month.
The 30-share BSE Sensex climbed 122.18 points to 61,256.06, and the broader NSE NIfty-50 index opened in the green, reflecting improved optimism in wider Asian markets which gained ground on Friday.
Traders positioning on the expiry of the futures and options (F&O) contracts on Thursday boosted domestic stocks, with both benchmarks reversing sharp losses from earlier in the session to end the day with gains near the fag end of trading.
"In view of a sharp rally in the overnight US markets, local benchmark indices are expected to commence on a firm note on the last trading day of 2022," said Prashanth Tapse, Senior Vice President for Research at Mehta Equities.
"Amidst intra-day volatility, markets may see select bouts of rally on hopes the lifting of restrictions in China could revive demand going ahead, although concerns over rising interest rates and recession fears continue to weigh on investors' minds," he added.
Equity benchmarks in China, Japan, and Australia advanced, but the S&P 500's contracts declined, dulling the impact of the index's 1.7 per cent gain on Thursday, which was its best day of the month.
Hopes for a spectacular rally to end 2022 were dashed by the uncertain outlook. This year, inflation made a comeback and destroyed a fifth of the value of global stocks, the worst run since the financial crisis.
With Asian markets plummeting more than 19 per cent this year, somewhat less than the decline for global shares, few regions escaped the agony.
Bond prices fell 16 per cent, the most since at least 1990 for one key metric, as central banks raced to raise interest rates globally to tame the global rise in consumer prices.
The largest MSCI index of shares traded in Asia-Pacific outside Japan rose over 0.7 per cent on Friday, but would close December flat. The index is on track to fall 19 per cent for the year, marking its worst performance since 2008.
“I'm actually not so afraid of tech,” Sylvia Jablonski, CEO and CIO at Defiance ETFs, said on Bloomberg TV. “I do think you're going to see a recovery later in the year in a lot of these stocks and I think that investors are a little bit too afraid of them right now. They're going to miss out on a rebound opportunity in the next let's say 6-9 months.”
However, the domestic equity market held up well despite significant global headwinds that roiled financial markets around the world this year.
A stellar performance of bluechips saw the 30-share Sensex soaring nearly 13,000 points to its all-time high of 63,583.07 on December 1, in less than six months after touching its 52-week low of 50,921.22 points on June 17.
In the commodities markets, oil was set to close higher in 2022, a turbulent year marked by tight supplies from the Russia-Ukriane war.
Gold was set for it second straight yearly drop on rate-hike pressure from near decades-high inflation globally.
Going into 2023, inflation has still to be beaten, and investors will also be wary of geo-political tensions arising from Russia's war in Ukraine and diplomatic strains over Taiwan, analysts told Reuters.
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Rupee Gains 3 Paise To 82.78 Per Dollar, But Was On Track For Yearly Fall
The rupee gained slightly against a steady dollar on the the last day of the year, quarter and month on hopes that oil companies, who have been continuously been buying dollars, would relent.
Bloomberg showed the rupee was at 82.7750 per dollar in early trade on the last interbank foreign exchange trading day of 2022, compared to its previous close of 82.8087 on Thursday.
"A tug-of-war between the bulls and bears is on in the USDINR amid low volatility and a lack of major cues due to year-end. The pair has strong support around 82.50 levels as we could see dollar demand from PSU banks on behalf of oil marketing companies. However, near 82.90 levels supply pressure exists, on the back of suspected RBI intervention and FII flows, which is keeping the USDINR in the narrow range," said Amit Pabari, Managing Director of CR Forex Advisors.
"Overall, the view remains the same. The pair is likely to top out near the 83.00 to 83.20 zone. Any rise in the spot market is a good opportunity to sell for exporters. In the near term, it is expected to fall back to 81.50-81.20 levels, where importers can look for hedging," he added.
The Federal Reserve's aggressive tightening of monetary policy and worries over the outlook for global economy have helped the dollar this year and the US currency was on track for its best yearly performance in seven years.
This year, the US dollar index, which measures the greenback against a basket of major peers, has rise over 8 per cent, the most since 2015.
To combat rising inflation, the Fed has increased rates by a total of 425 basis points since March, a move that has maintained the dollar strong for the most of the year.
The greenback has unwound from its massive rise, however, on predictions that the central bank may not need to hike rates as much as earlier anticipated. The dollar has fallen over 7 per cent this quarter.
"I expect the king dollar to lose its crown and the dollar to make a more decisive turn by the middle of next year," Moh Siong Sim, Currency Strategist at Bank of Singapore, told Reuters.
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Rupee Gains 3 Paise To 82.78 Per Dollar, But Was On Track For Yearly Fall
The rupee gained slightly against a steady dollar on the the last day of the year, quarter and month on hopes that oil companies, who have been continuously been buying dollars, would relent.
Bloomberg showed the rupee was at 82.7750 per dollar in early trade on the last interbank foreign exchange trading day of 2022, compared to its previous close of 82.8087 on Thursday.
"A tug-of-war between the bulls and bears is on in the USDINR amid low volatility and a lack of major cues due to year-end. The pair has strong support around 82.50 levels as we could see dollar demand from PSU banks on behalf of oil marketing companies. However, near 82.90 levels supply pressure exists, on the back of suspected RBI intervention and FII flows, which is keeping the USDINR in the narrow range," said Amit Pabari, Managing Director of CR Forex Advisors.
"Overall, the view remains the same. The pair is likely to top out near the 83.00 to 83.20 zone. Any rise in the spot market is a good opportunity to sell for exporters. In the near term, it is expected to fall back to 81.50-81.20 levels, where importers can look for hedging," he added.
The Federal Reserve's aggressive tightening of monetary policy and worries over the outlook for global economy have helped the dollar this year and the US currency was on track for its best yearly performance in seven years.
This year, the US dollar index, which measures the greenback against a basket of major peers, has rise over 8 per cent, the most since 2015.
To combat rising inflation, the Fed has increased rates by a total of 425 basis points since March, a move that has maintained the dollar strong for the most of the year.
The greenback has unwound from its massive rise, however, on predictions that the central bank may not need to hike rates as much as earlier anticipated. The dollar has fallen over 7 per cent this quarter.
"I expect the king dollar to lose its crown and the dollar to make a more decisive turn by the middle of next year," Moh Siong Sim, Currency Strategist at Bank of Singapore, told Reuters.
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Wednesday, December 28, 2022
Rupee Steady At Around 82.84 Per Dollar Even As Risk Sentiment Sours
The rupee was steady against the dollar on Thursday as optimism over China reopening turned to caution after a rapid surge in cases, but was offset by a fall in crude prices.
Bloomberg showed the rupee was last changing hands at 82.8387 per dollar, compared to its previous close of 82.8663 on Wednesday.
PTI reported that the domestic currency rose 3 paise to 82.77 against the US dollar in early trade.
In the previous session, the rupee closed nearly flat, supported by the Reserve Bank of India after it fell to a one-month low of 82.9225 on Wednesday.
The currency moved in a narrow 10-paisa range in the previous session, with the 82.80-82.90 acting as a strong support zone as it has done over the past two weeks.
"USDINR to open flat at around 82.84 after Dow Jones fell by 365 points overnight and Nasdaq neared its yearly lows as rising China Covid cases brought back economic concerns. Asian currencies were down against the dollar," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.
"The USDINR pair to remain in the range of 82.50 to 83.00 with the RBI protecting the 82.90 level and dollar demand from oil companies weighing on the domestic currency. While quarter-end supplies could bring the pair down a bit, overall global recession concerns continue to hamper any significant recovery in the rupee," he added.
But investors have cautioned that it would be difficult to predict a direction because of the low volume of trading during the Christmas season.
Meanwhile, oil prices dropped to $82.8 per barrel as hopes for a recovery in demand were dashed by a spike in China's Covid cases.
Although a drop in crude prices could be modestly encouraging, the currency is still following the dollar and is likely to consolidate in the current range; a foreign exchange dealer told Reuters.
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Rupee Steady At Around 82.84 Per Dollar Even As Risk Sentiment Sours
The rupee was steady against the dollar on Thursday as optimism over China reopening turned to caution after a rapid surge in cases, but was offset by a fall in crude prices.
Bloomberg showed the rupee was last changing hands at 82.8387 per dollar, compared to its previous close of 82.8663 on Wednesday.
PTI reported that the domestic currency rose 3 paise to 82.77 against the US dollar in early trade.
In the previous session, the rupee closed nearly flat, supported by the Reserve Bank of India after it fell to a one-month low of 82.9225 on Wednesday.
The currency moved in a narrow 10-paisa range in the previous session, with the 82.80-82.90 acting as a strong support zone as it has done over the past two weeks.
"USDINR to open flat at around 82.84 after Dow Jones fell by 365 points overnight and Nasdaq neared its yearly lows as rising China Covid cases brought back economic concerns. Asian currencies were down against the dollar," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.
"The USDINR pair to remain in the range of 82.50 to 83.00 with the RBI protecting the 82.90 level and dollar demand from oil companies weighing on the domestic currency. While quarter-end supplies could bring the pair down a bit, overall global recession concerns continue to hamper any significant recovery in the rupee," he added.
But investors have cautioned that it would be difficult to predict a direction because of the low volume of trading during the Christmas season.
Meanwhile, oil prices dropped to $82.8 per barrel as hopes for a recovery in demand were dashed by a spike in China's Covid cases.
Although a drop in crude prices could be modestly encouraging, the currency is still following the dollar and is likely to consolidate in the current range; a foreign exchange dealer told Reuters.
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Sensex Surges And Nifty Ends Above 18,000 To Stall A 4-Day Bear Run
Indian equity benchmarks reversed course to rally sharply on Monday in a low-volume session, stalling a four-day losing streak, even as fears remain over China's ability to adapt after abandoning its Covid Zero policy and quelled the appetite for risk-taking.
Bouncing back from four days of losses and a weaker opening, the 30-share BSE Sensex index rallied 721.13, or 1.2 per cent, to close at 60,566.42, and the broader NSE Nifty-50 index rose 207.80 points, or 1.17 per cent, to end at 18,014.60.
The domestic stocks rallied despite cautious trading and reduced liquidity with many markets closed for holidays.
"I expect the markets to recover sharply as the punishment meted out on Thursday and Friday was unwarranted", G Chokkalingam, Founder and Head of Research at Equinomics Research and Advisory, told Reuters.
However, Mr Chokkalingam cautioned of low volumes. "Normally, trading is thin this time of the year. Expect dullness in the market as foreign institutional activity dies down as they go on holidays."
The rupee, too, rose sharply against the dollar, recouping all it Friday's losses and some.
While global stock markets that were open made small advances, the positive impact of recent US inflation data was partially offset by worries about China's ability to adapt after abandoning its Covid Zero policy.
China's National Health Commission announced it would stop providing daily coronavirus case data in the midst of a new wave of infections, making it more difficult for investors to evaluate the virus's economic impact.
"The undertone is likely to remain cautious," said Prashanth Tapse, Senior Vice President for Research at Mehta Equities.
"Relentless cascade of COVID-19 news is likely to make any investment decision challenging in the near term, as markets fear the risk of new virus spread could bring back stricter lockdowns," he added.
The Federal Reserve's closely monitored measure of inflation dropped and consumer spending was stagnant, according to data released on Friday. According to a University of Michigan survey, consumer expectations for inflation in the coming year decreased this month to their lowest level since June 2021.
Even though US stocks ended the week higher on Friday after that data, the S&P 500 and the heavily tech-focused Nasdaq 100 nevertheless recorded weekly losses.
"The US is enjoying ‘Christmas day' today and UK/Europe is enjoying ‘Boxing Day'. S&P is on track for a more than 6 per cent decline this month, its fourth worst December on record as US value funds and passive equities had record weekly net outflows," said Amit Pabari, Managing Director of CR Forex Advisors.
The performance of global stocks in 2022 as a whole was the worst it has been in more than a decade. Global stocks faced major turning points in 2022 after a two-year bull run that was fueled by liquidity as Russia invaded Ukraine, the US Fed waged a fierce struggle against inflation, and a disaster enveloped international financial markets.
“The Fed has been telling us they are going to tighten financial conditions until a recession or something ‘breaks',” Stephen Innes, managing partner at SPI Asset Management, wrote in a note, according to Bloomberg.
“This is not a great place to own speculative assets, especially the long-duration variety telling me in times like this, cash itself is the best at the money put.”
Still, in a challenging year, the Sensex has outperformed its competitors, with domestic investors supporting the benchmark during this year's crises.
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