ETMarkets Morning Podcast: Will banks spoil the show in Q1? | The Economic Times Podcast

· LIC cleaning up books in preparation for IPO
· IPO-bound Zomato says it is recovering well from Covid hit
· Banks may report slowdown in the recovery momentum in Q1
· French court freezes Indian assets on Cairn Energy claim

Now lemme give you a quick glance on the state of the markets.

Dalal Street looked indecisive this morning as Nifty futures traded flat on the Singapore Exchange at 7 hours (IST). Other Asian markets followed US equities lower on growing anxiety that the spread of Covid-19 variants could hamper the global economic recovery. Wall Street lost ground overnight, with the S&P 500 and the Nasdaq pulling back from record closing highs in a broad sell-off driven by uncertainties surrounding the pace of the US economic recovery.

· Elsewhere, US Treasuries trimmed a rally. The dollar held steady. Bitcoin has fallen back towards the lower end of a trading range amid a pull back in cryptocurrencies. Oil rebounded after a US govt report showed rapidly declining inventories and record-high fuel demand in the midst of the peak summer travel season.

That said, here’s what is making news?

LIC is cleaning up its books ahead of its IPO later this year. The corporation, which brought down its net non-performing assets to 0.05% as of March 2021 from 0.79% as of March 2020, is now selling its fully provided NPAs. As part of its IPO plans, LIC plans to audit its half-yearly accounts for the period ended September 2021. Traditionally, it has been publishing only full-year accounts. The government has also notified that LIC Chairman will now be designated as chief executive in an attempt to fast-track to listing process.

Food aggregator Zomato said it is recovering well after the pandemic-hit year, which saw its revenue plummet. It said the first quarter of this fiscal was better than the same period last year. The company also said it will soon launch a grocery section on its app. It had recently made a big investment in grocery e-tailer Grofers. Zomato, which is launching its IPO next week, reported operating revenue of Rs 1,993 crore for the year ended March, down 23.5% from Rs 2,604 crore in the year before.

Indian banks could report a slowdown in the recovery momentum seen in the March quarter, with asset quality outlook dimming again after a brief bright interlude and system-level growth moderating to 5.8%, analysts said. Many banks indicated a drop in collection efficiency, leading to possibly even more slippages in the first half of FY22. But even here, there would be winners and relative stragglers.

A French court has ordered a freeze on residential properties owned by the Indian government in central Paris, in what is seen as a setback for the Centre in its tax dispute with London-listed Cairn Energy. The ruling based on Cairn Energy’s application will impact some 20 properties, valued at more than 20 million euros or Rs 177 crore, as part of a guarantee of the debt owed to the British company that exited India a few years ago.

RBI on Thursday warned banks and financial institutions against structuring deals linked to the London Interbank Offered Rate (LIBOR) as the global rate gauge, a longstanding reference frame for cross border fund-raising, is nearing the end of its shelf life and will be replaced starting next year. “Banks and financial institutions are encouraged to cease entering into new financial contracts that reference LIBOR as a benchmark,” the central bank said Thursday.

LASTLY,

Indian savers continue to repose their trust in equities to help build a nest egg for the future, with mutual funds focused on stocks drawing more funds in June despite headline indices hitting record highs and discussions on valuations consuming more column inches than ever. Investors put in Rs 5,988 crore in June, lower than May’s Rs 10,083 crore, but registering net additions to the equities kitty for the fourth straight month. Debt funds, too, saw net flows of Rs 3,566 crore.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

· TCS’s revenue in constant currency grew by 16.4% in the first quarter compared to the same quarter last, partly a reflection of the low base last year when revenue fell due to the first wave of Covid-19.

· ICICI Bank has shut the LRS door for crypto traders, and is telling customers remitting funds to invest abroad to give a declaration that the money will not be used to buy cryptocurrencies.

· CDSL on Thursday said the number of active demat accounts opened with it has reached the 4-crore mark.

· Resolution professional Deloitte told the bankruptcy court in Mumbai that Reliance Communication’s insolvency process will go kaput if the DoT terminates its telecom licence due to unpaid dues.

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