New Delhi,

 The week went by and had four trading days with a mid-week holiday on May 1, thereby making it two periods of two days each. The volatility witnessed was several notches higher than usual. Surprises one to note that just about 10 days ago, India VIX, which is the volatility index, crashed to a new low. Maybe it was the lull before the storm.

On Tuesday and Friday, NIFTY made new highs and then fell sharply, closing in the red. Not sure how one should read it, but the scene is not comfortable. At the end of the week, BSESENSEX gained 147.99 points or 0.20 per cent to close at 73,878.15 points, while NIFTY gained 55.90 points or 0.25 per cent to close at 22,475.85 points.

The broader indices saw BSE100, BSE200 and BSE500 gain 0.55 per cent, 0.70 per cent and 0.61 per cent respectively. BSEMIDCAP was up 1.99 per cent, while BSESMALLCAP was down 0.10 per cent. Plenty of mixed signals in the marketplace. Markets gained on two sessions and lost on two. Incidentally, gains and losses alternated with Monday and Thursday gaining while Tuesday and Friday were losing days.

The Indian Rupee lost eight paise or 0.10 per cent to close at Rs 83.42 to the US Dollar. Dow Jones was on a roller coaster ride with gains on four days and losses on one day. Wednesday saw the FED meet for its policy review meeting, where they decided on expected lines to keep interest rates unchanged.

After the meeting, the commentary spelt out very clearly that inflation higher than 2 per cent will not see any rate cuts. This saw markets rallying sharply on Thursday and Friday. One wonders why markets in the US are hell-bent on just a rate cut. One needs to see that economic data is red hot and points to a booming economy. Things could not be better. Why bother about a rate cut at all?

Coming to our markets and the crazy movement we witnessed last week. Tuesday, April 30, saw NIFTY make a new lifetime high at 22,783 points. The previous day’s close was 22,643 points.

After the high, markets fell sharply and closed at 22,604 points and closed in the red, losing 39 points. BSESENSEX made a high at 75,111 points but did not make a new high. The previous day’s close was 74,671 points. From there, the market fell to 74,488 points, losing 183 points.

Friday, May 3, was even more volatile.

NIFTY made a new lifetime high yet again at 22,794 points against the previous day’s close of 22,648 points. It fell very sharply to close at 22,475 points, a loss of 319 points from the high and 173 points from the previous day’s close.

BSESENSEX made a high at 75,095 points against the previous day’s close of 74,611 points. From there, it fell very sharply to lose 1,217 points from the high and 610 points from the previous day’s close. Indeed, very volatile and a bit scary.

The week ahead has three primary issues tapping the capital markets. Indegene Limited is tapping the markets with Indegene Limited tapping the capital markets with its fresh issue for Rs 760 crore and an offer for sale of 2,39,32,732 shares in a price band of Rs 430-452.

The issue would open on Monday, May 6, and close on Wednesday, May 8. The fresh issue and offer for sale would raise Rs 1,841 crore at the top end of the price band.

The company provides digital-led commercialisation services for the life sciences industry, including bio-pharmaceutical, emerging biotech and medical devices companies, that assist them with drug development and clinical trials, regulatory submissions, pharmacovigilance and complaints management, and the sales and marketing of their products.

Indigene is an integrated solutions provider, and almost 85 per cent of its revenues come from its US subsidiary.

The company reported revenues of Rs 2,306 crore for the year ended March 23, an EBITDA of 19.69 per cent, and a Profit after-tax margin of 11.54 per cent. In absolute terms, the profit after tax was Rs 266.09 crore. The EPS on a fully diluted basis was Rs 11.97. At this EPS, the PE band for the issue is 35.92-37.78.

There is no comparable company or peer set in the Indian space, while there are some comparable foreign companies globally. The share offers an opportunity for investors with a medium to long-term outlook. There could be listing pop, as well as available considering that markets are at lifetime highs or thereabouts.

The second issue is from Aadhar Housing Finance Limited. The issue is entirely an offer for the sale of Rs 2,800 crore. The price band is Rs 300-315. The selling shareholder is the promoter. This company was acquired from the DHFL group when they fell on bad times around 2016-17.

The company acquired was clean and had no issues while the group was struggling with various issues. The issue will open on Wednesday, May 8, and close on Friday, May 10. The company is a housing Finance company focused on the low-income housing segment with a cap on ticket size at Rs 15 lakh.

In terms of performance, the company reported a gross AUM of just under Rs 20,000 crore at the end of the nine-month period ended December 2023. A mix of the clients they serve is 60 per cent salaried and 40 per cent self-employed. The average ticket size is between Rs 9 lakh to 10 ten lakh.

The company reported an EPS of Rs 13.8 for the year ended March 2023, which on a fully diluted basis was Rs 13.4. The PE band for the issue of diluted earnings is 22.4-23.5. NAV for the company at the end of December 23 is Rs 107.6. The price to book at this NAV is 2.92 at the top end of the band.

Based on the post-issue, the NAV would improve to Rs 123.07 at the top end of the band, and the same ratio would be at 2.56 times the price to book. This compared more than favourably with the peer set. There is money to be made in the issue in the medium to long term. There would be some listing pop as well.

The third issue is from TBO TEK Limited. It consists of a fresh issue of Rs 400 crore and an offer for sale of 1,25,06,797 equity shares. The price band is Rs 875-920. The issue would open on Wednesday, May 8, and close on Friday, May 10.

The company operates an online B2B travel portal distribution platform that connects buyers and sellers. It is present in the airline and hotel business currently. It earns a commission from the airlines whose tickets are sold on the platform while it charges a markup on the rooms sold on the platform.

The company is in a negative working capital cycle as it pays after receiving the money. It is adding new offerings on the platform and has recently added the Eurail on its platform recently.

The company reported an EPS of Rs 14.07 on a fully diluted basis for the year ended March 2023, and the PE band would be 62.19-65.39 on this EPS. There is no comparable peer in India in this space, and the listed players are basically online travel players like Make My Trip, Easy Trip and Yatra Online, who would be using the platform provided by TBO TEL Limited.

The issue offers scope on listing and in the medium to long term as well.

Coming to the markets, we are at a crossroads once again. On the upside, I would go long only if 22,800 on the NIFTY and 75,200 on the BSESENSEX are crossed and sustained. On the downside, immediate support exists at 22,100 points on NIFTY and 72,800 points on BSESENSEX. It is time to be cautious, as the wild gyrations last week are not giving comfort. The strategy would be to sell on any rallies and buy on sharp dips.

AGENCIES

New Delhi,

 The performance of large cap stocks has been impacted by FIIs remaining net sellers in the market.

Vinod Nair, Head of Research, Geojit Financial Services said the ongoing results season will be a key factor for investors to align their portfolios. The market will also remain vigilant about the BoE policy and GDP data from the Eurozone.

“We expect a degree of consolidation in the market due to expensive valuations and any election-led jitters,” he said.

The FIIs continued to remain net sellers in the market, which has impacted the performance of large cap stocks, he added.

A marginally better-than-anticipated Q4 earnings and a correction in oil prices led to a positive start to the domestic market during the week. However, a mixed trend in the global market after the release of a status quo FED policy with caution about sustaining a high inflation trend led to a broad-based correction in the domestic market, he said.

The positive commentary from the auto companies on recent volume numbers led the sector to outperform. Additionally, stock-specific action was visible in banks and the power sector on account of positive Q4 results and increased power demand, he said.

Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services said: “We expect the market to consolidate in a broader range.”

 AGENCIES

New Delhi,

 India has discussed the issues of pharmaceutical pricing control in generic drugs and the need for closer cooperation in critical minerals with Australia, the Union Commerce Ministry said on Saturday.

The need for closer collaboration for establishing disease-free zones for shrimps and prawns in India also came up for discussion at the first Joint Committee Meeting (JCM) in Canberra under the India-Australia Economic Co-operation and Trade Agreement (Ind-Aus ECTA), the ministry said.

Besides, the JCM meeting also addressed certain critical services issues, including the consideration of India’s request for facilitation of cross-border e-payments and mutual recognition of qualifications in professions like nursing and dentistry.

India and Australia are looking at joint investments to build new supply chains underpinned by critical minerals processed in Australia that will help India’s plans to lower emissions from its electricity network and become a global manufacturing hub, for electric vehicles and smartphones.

Critical minerals are a key raw material in these hi-tech products. Currently, China has a near-monopoly on critical minerals. India and Australia are both keen to set up a strong alternative supply chain to break China’s dominance of the market.

“The two sides have decided to work closely on timely resolution of market access issues, deepen people-to-people contacts, and create an institutional mechanism for sharing of preferential import data,” according to the ministry statement.

India and Australia have already signed an Economic Cooperation and Trade Agreement (ECTA) that came into effect on December 29, 2022.

“Both sides while acknowledging the smooth implementation of the ECTA, briefly elaborated on ECTA implementation issues including MRAs (mutual recognition agreements) on organic products, market access issues related to products like okra, pomegranate, grapes, cottage cheese, .pharmaceutical pricing control in Australia particularly on generics, progress made by the working group on whisky and wine,” the ministry said.

The meeting also touched upon the WTO issues wherein both sides appreciated the Commerce Secretary’s stand on the importance of the support of Australia for early resolution of the long pending issue of a permanent solution to public stock holding (PSH).

Australia sought the support of India for the plurilateral arrangement for domestic support for services. Both sides agreed to discuss these matters intersessionally if required.

AGENCIES

Seoul,

 Sales of eco-friendly cars surpassed 100,000 units in the first quarter in South Korea on booming demand for hybrid vehicles, industry data showed on Sunday.

A total of 101,727 environment-friendly cars made by five South Korean carmakers, including Hyundai Motor and Kia, were sold during the January-March period, up 8.7 per cent from a year earlier, according to the data.

Out of this total, 85,828 units, or 84.4 per cent, were hybrid cars, soaring 42.4 per cent from the same period last year, reports Yonhap news agency.

Sales of electric vehicles, meanwhile, plunged 51.4 per cent on-year to 15,237 units in the first quarter.

There has been a global slowdown in EV sales.

Even Elon Musk has said that EV adoption rate globally is “under pressure” and a lot of other auto manufacturers are “pulling back on EVs and pursuing plug-in hybrids instead.”

By model, Kia’s Sorento Hybrid was the best-selling model in the first quarter with 19,729 units sold, followed by Hyundai’s Santa Fe Hybrid with 15,981 units and Kia’s Carnival Hybrid with 12,203 units.

AGENCIES

New Delhi,

 Drug makers Cipla and Glenmark are recalling their products from the US market due to manufacturing issues.

In accordance with the latest Enforcement Report from the US Food and Drug Administration (USFDA), Cipla’s subsidiary in New Jersey is recalling 59,244 packs of Ipratropium Bromide and Albuterol Sulfate Inhalation Solution.

The reason for recalling the affected lot of Cipla products is “short fill”.

“Complaints received of less fill volume in respules and few drops of liquid observed in the intact pouch,” the US health regulator said.

The recalled drug is used to help control the symptoms of lung diseases, including asthma, chronic bronchitis and emphysema.

As mentioned by the USFDA, Glenmark is recalling 3,264 bottles of Diltiazem Hydrochloride extended-release capsules, which are used to treat high blood pressure.

The US-based arm of the company, Glenmark Pharmaceuticals initiated the nationwide recall of the drug due to “failed dissolution specifications”.

Meanwhile, drug maker Lupin has recalled products in the US market for manufacturing issues, according to the US health regulator.

As per the latest Enforcement Report by the USFDA, Lupin recalled 26,352 bottles of Rifampin Capsules (300 mg), an antibiotic medication in the US market.

AGENCIES

New Delhi, May 5

 As India aims to reach $300 billion electronics production by FY26, it will trigger demand for semiconductors worth $90-$100 billion, largely driven by domestic mobile manufacturing — an opportunity the country must tap.

The current electronics manufacturing at nearly $103 billion translates to a semiconductor requirement of $26-$31 billion, considering the industry average of 25 to 30 per cent of chip components in any electronics product’s bill of material (BOM).

“With the expected rise in electronics production ($300 billion by 2026), this number is set to rise substantially to $90-$100 billion,” according to the data by the India Cellular and Electronics Association (ICEA).

Mobile phone production contribution in the overall electronics manufacturing jumped from 10 per cent to a whopping 44 per cent in the span of the last seven years.

In FY23, the total import of integrated circuits (ICs) reached $16.14 billion (out of which $12 billion was only for mobile phones).

According to the ICEA, processor chips, which are advanced chips specifically for high-end phones, may require some time before India can produce them at a competitive level.

“However, there is a commercial viability in fabricating processor chips for entry-level smartphones in India. This could be a consideration for the new semiconductor fabs,” said the apex industry body.

The data showed that with a monthly output of around 1.5 million units (10-14 nm) of chipsets – assuming 15,000 wafers of 300mm at 70 per cent yield from a fab, and considering the number of dies per wafer to be 148 – the annual output could be approximately 18 million chipsets.

Therefore, the critical task before all the stakeholders is to translate the burgeoning semiconductors requirement into domestic production and reduce dependency on imports.

“This transition would boost domestic procurement and increase the viability of the semiconductor fabs in India,” said the ICEA.

Prime Minister Narendra Modi in March laid the foundation stone for three semiconductor projects worth Rs 1.25 lakh crore. 

  AGENCIES

Islamabad, May 4

 Pakistan government’s decision to form a national agency called the National Cyber Crime Investigation Agency (NCCIA) has raised concerns in the country with several experts citing that the move would not only gravely affect citizens’ right to privacy but is also aimed at targeting the massive social media presence of jailed ex-PM Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party.

The Establishment Division of the Pakistan government announced the formation of NCCIA with the prime focus on countering propaganda and rumours on social media and safeguarding the digital rights of people.

“There must be an end to harassment, including online,” said Federal Minister for Information and Broadcast Attaullah Tarar on Thursday.

He added that there was an “immediate and dire need” of an authority like NCCIA to address the issue of online harassment and also to protect the digital rights of consumers.

However, security experts do not agree with the government and have expressed serious concerns over the negative effects on the citizen’s right to privacy.

“It raises concerns that go beyond the duplication of efforts and resources, the move may also gravely affect citizen’s right to privacy which seems to have been overlooked in the rush to bolster cyber defences,” said Khawaja Khalid Farooq, former Inspector General of Police and ex-head of National Counter-Terrorism Authority.

Another view states that the military establishment wants to have a strong strategy and authority in place to tackle the anti-establishment campaigns run by PTI through its large presence on social media.

“PTI is the only political party in Pakistan with a very strong social media presence. Its campaigns and social media teams have the strongest influence on the masses through social media engagements,” says senior political analyst Javed Siddique.

“The anti-military sentiments have prevailed and broadly expressed on social media platforms by PTI and Imran Khan’s supporters. NCCIA may be designated and directed to work with prime focus on tackling the dissemination of PTI-led anti-establishment campaigns on social media under the legal cover of the controversial PECA act,” he adds.

It is pertinent to note that formation of NCCIA would render the already-existing Cyber Crime wing of the Federal Investigation Agency (FIA) as defunct.

As per the notification in the Gazette of Pakistan, the formation of NCCIA has been formed under Section 51 of the Prevention of Electronic Crimes Act 2016 (PECA). The notification also mentioned that NCCIA would take over the cyber crime investigations of the FIA Cyber Crime Wing in December 2024, adding that FIA would now cease to perform functions as designated agency under the act.

“The NCCIA will be headed by a Director General, chosen by the federal government to serve a two-year term. The NCCIA chief would exercise the powers of an Inspector General of Police while the agency’s affairs related to the federal government’s business would be allocated to the Interior Division,” the Gazette of Pakistan notification maintained.

Experts, however, believe that the formation of NCCIA is irrelevant because FIA cyber crime wing has got the framework, requisite capabilities and is equipped to deal with cyber threats.

“Creating the NCCIA to replace the FIA’s cyber crime wing could result in an overlap of responsibilities, leading to bureaucratic inefficiencies and confusion,” said Farooq.

“There is a risk that the pursuit of cyber security, privacy rights could be compromised without stringent checks and balances in place,” he added.

Another view states that the military establishment wants to have a strong strategy and authority in place to tackle the strong social media presence of Pakistan Tehreek-e-Insaf (PTI) that targets the military establishment.

“PTI is the only political party in Pakistan with a very strong social media presence. Its campaigns and social media teams have the strongest influence on the masses through social media engagements. The anti-military sentiments have prevailed and broadly expressed on social media platforms by PTI and Imran Khan’s supporters. NCCIA may be designated and directed to work with prime focus on tackling the dissemination of PTI led anti-establishment campaigns on social media under the legal cover of the controversial PECA act,” said senior political analyst Javed Siddique.

AGENCIES

Washington, May 4

Indian Americans are calling upon a US university not to implement a portion of one of the demands it conceded to protesting students to display on campus the flags of “occupied people”, which listed Kashmiris along with Palestinians and the Kurds.

“This is a dangerous territory for Rutgers to get involved (sic),” Thomas Abraham, chairman of the Global Organization of People of Indian Origin (GOPIO), wrote in a letter to Jonathan Holloway President, Rutgers University-New Brunswick in New Jersey state.

“By even considering this demand, you are questioning the integrity of India. Kashmir is very much part of India. There is no separate flag for Kashmir. Kashmir residents are not displaced people. In fact, the displaced people are the Hindu minorities who had to leave Kashmir because of violence against them. If Rutgers displays such a flag of Kashmir, that will be the beginning of more sit-ins by students who are opposed to such flags,” Abraham wrote.

The university has not implemented this demand.

“The Office of the Chancellor will take stock of flags that are displayed across Rutgers- New Brunswick campus, and ensure appropriate representation of students enrolled in academic and other spaces,” Chancellor Francine Conway wrote in a three-page letter responding to the protesting students on Thursday.

The students had demanded, as specified in her letter, “display the flags of occupied peoples — including but not limited to Palestinians, Kurds, and Kashmiris – in all areas displaying international flags across the Rutgers campuses”.

Students were protesting the Israeli war in Gaza as students of many universities across the country and had put forth 10 demands.

The top demand, which has been common to protesters in all other universities, was divestment from companies doing business with Israel or supporting its war effort and cutting links with Israel.

The chancellor said the university is reviewing these links and will discuss the findings with the students.

Indian Americans are focussed on the one allowing the display of the flag of the “occupied people” of Kashmir. “So @RutgersU has caved,” Suhag Shukla of the Hindu American Foundation wrote in a post on X.

AGENCIES

Sanaa, May 1

 The US-British coalition in the Red Sea launched a fresh airstrike on Yemen’s Houthi-held port city of Hodeidah, media reported.

The strike targeted the port of Ras Issa in the northwestern district of al-Salif, the Houthi-run al-Masirah TV said on Tuesday without providing additional details.

Residents described the explosion as powerful, saying the strike hit a Houthi position, Xinhua news agency reported.

The coalition has yet to comment on the alleged strike.

Since last November, the Houthis, who control much of northern Yemen, have initiated the launch of anti-ship ballistic missiles and drones targeting Israeli-affiliated vessels passing through the Red Sea, to show support for Palestinians in the Gaza Strip.

They said their attacks would not stop unless Israel stops its military operation in Gaza.

In January, the US and Britain launched a military operation by carrying out airstrikes on Houthi military sites.

In response, the Houthis escalated their attacks on commercial and military vessels from the US and Britain in the Red Sea and the Gulf of Aden. AGENCIES

United Nations, May 1

 As Israel’s Prime Minister Benjamin Netanyahu stood firmly by his determination to send troops into Rafah, UN Secretary General Antonio Guterres appealed for international pressure to stop the attack on the area where more than 1.2 million Palestinians are sheltering from Israeli invasion that has rolled across most of Gaza.

“I appeal for all those with influence over Israel to do everything in their power to prevent it,” he said on Tuesday.

“A military assault on Rafah would be an unbearable escalation, killing thousands more civilians and forcing hundreds of thousands to flee” the area where “more than 1.2 million people are now seeking shelter in Rafah governorate, most of them fleeing the Israeli bombardment that has reportedly killed over 34,000 people”, he said at a news conference.

Netanyahu, meanwhile, stated firmly: “We will enter Rafah and we will eliminate Hamas’ battalions there, with or without a deal, to achieve the total victory”.

The statement came ahead of US Secretary of State Antony Blinken’s visit to Israel where he is expected to reinforce President Joe Biden’s opposition to the invasion of Rafah, which, according to the White House, the President reiterated to Netanyahu in a phone call on Sunday.

Guterres warned that an incursion into Rafah would have “serious repercussions on the occupied West Bank, and across the wider region”.

The US and its allies have been trying to get Israel and Hamas on a deal that would lead to a ceasefire and the release of some hostages kidnapped by the terror organisation in an attack on Israel in October.

Blinken said in Riyadh on Monday that “Hamas has before it a proposal that is extraordinarily – extraordinarily – generous on the part of Israel”.

“And in this moment, the only thing standing between the people of Gaza and a ceasefire is Hamas. They have to decide, and they have to decide quickly,” he said.

According to media reports, Israel has lowered the number of hostages it demanded freed to less than 40 in exchange for the release of some Palestinian prisoners and a limited ceasefire.

Guterres warned that a famine was looming over Gaza because of limited access to food. He called for the opening of two more crossing points between Israel and northern Gaza to enable the delivery of aid into Gaza from Ashdod port and Jordan.

According to the State Department, Blinken on Tuesday met UN Senior Humanitarian and Reconstruction Coordinator for Gaza Sigrid Kaag in Amman and discussed the “shared commitment to surge critical humanitarian assistance in Gaza and ensure the recent increase in delivery of assistance is accelerated and sustained”.

Guterres said that he was “deeply alarmed” by the discovery of mass graves in Gaza, including at two medical complexes.

Given the “competing narratives” around the mass graves and the killing of those buried there, he said that “it is imperative that independent international investigators, with forensic expertise, are allowed immediate access to the sites of these mass graves”.

Guterres reiterated his condemnation of Hamas with a reference to the Jewish holy days. “As Passover ends, I once again express my solidarity with the victims of the unconscionable Hamas terror attacks of 7 October, with the hostages, and with their families and friends.” AGENCIES