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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

December 28, 2021 / 08:24 AM IST

Will Sensex hit 72,000 points in 2022?

Stock market analysts are positive on 2022 returns, with some brokerages projecting a Sensex target as high as 72,000 points and a corresponding Nifty target of 21,000. The bullish targets suggest 23-26 percent potential upside for the market indices in 2022.

Why it’s important: The next calendar year might be a roller coaster for the stock market due to uncertainty around the more infectious Omicron variant of Covid-19, increase of interest rates and surge in inflation all around the world. However, since the long-term India growth story remains intact, most analysts say the stock market will gain substantially if global and domestic cues are positive.

 

Fintech and acceptance of digital firms were high points in 2021

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The significance of the fintech revolution is evident from the fact that India has 14 fintech unicorns that have valuation in excess of $1 billion, and six of the top eight are payment companies. Digital adoption was not just restricted to the startups but was equally widespread among enterprises.

Why it’s important: Every aspect of finance is getting a tech impetus. The digital economy is expected to touch $800 billion by 2030, a 10-fold growth from a value of $85-90 billion in 2020. In 2022, experts foresee a huge disruption in financial technology, especially in embedded finance.

 

Paytm debacle fails to halt surge in initial public offerings

Fourteen companies have hit the market with an IPO after the Paytm offering. Ten of the 14 have seen oversubscription of over five times, with eight getting oversubscribed in double digits. Of the 11 companies that subsequently listed on the bourses, six have seen double-digit gains on the first day of listing, while only three ended in the red.

Why it’s important: The initial offerings in 2022 look more promising, with 35 companies approved to raise around Rs 500 billion. Another 33 firms are waiting for the markets regulator’s nod to raise around Rs 60000 billion next year. The mega IPO of Life Insurance Corporation, which is expected to raise Rs 1 trillion, is likely to be launched next year.

 

RBI allays fears over RBL Bank after stock tanks

The Reserve Bank of India reassured depositors and shareholders of RBL Bank as its shares fell 23% on Monday, after a weekend decision by the central bank to name its nominee to the board raised concerns about the lender. RBL Bank is well capitalized, and the financial position of the bank remains satisfactory, the regulator said.

Why it’s important: There could be more pain ahead for the bank as the perceived management problems could delay normalization of business, and the stock may soon be replaced in the Nifty Bank index.

 

Reliance to invest Rs 3 billion in warehouse robotics company

Reliance Retail Ventures, the retail unit of Reliance Industries, may acquire a minority stake in warehouse robotics company Addverb Technologies for around Rs 3 billion. If the deal goes through, it will value Addverb Technologies at Rs 15.9-16.6 billion.

Why it’s important: Reliance retail has made several acquisitions this year. Addverb’s products help companies utilize space better in warehouses and factories by leveraging robotics and warehouse automation. It caters to industries such as e-commerce, health, aviation, retail, grocery, fashion, third-party logistics, pharmaceuticals, and auto parts.

 

Price rise likely to pinch consumer pockets less in 2022

As the economy recovers from the coronavirus pandemic, inflationary pressure is anticipated to ease marginally in the coming months. Reserve Bank of India, which considers retail inflation as one of the key components to review the repo rate, has projected Consumer Price Index to ease to around 5 percent by the first half of the next calendar year.

Why it’s important: High inflation at a time of shrinking incomes has distressed many Indian households. Millions will find some relief is price rise in essential items slows down.

 

Indian IPOs see record foreign investment of $10.8 billion in 2021

Foreign portfolio investors showed high in the primary equity market in 2021, notwithstanding their relentless selling on Indian bourses in the second half of the year. They poured in a record $10.8 billion in the primary market so far in 2021. Due to this, they have been net buyers of $3.9 billion worth of Indian equities despite selling $6.8 billion worth of stocks in the secondary market.

Why it’s important: India’s primary market provides an opportunity to acquire stocks at a discount because the valuation offered in an IPO is usually at 10-35% lower than that of the listed peers. It leaves room for positive earnings-led surprise in the medium term.

 

Bangladesh may become India’s fourth largest export destination in 2021-22

Bangladesh may become India’s fourth largest export destination in financial year 2022, jumping five places in two years. This comes as the economic boom of the eastern neighbor continues to fuel India’s exports growth. Between April and October 2021, exports to Bangladesh grew 81 percent over the same period in the preceding year to $7.7 billion. This makes it India’s fourth largest export market behind the US, the United Arab Emirates and China.

Why it’s important: Bangladesh has been an economic miracle in South Asia with its unprecedented transformation over the past decade and may even surpass India in terms of per capita income. The major items exported to Bangladesh by India during the April-October period include cotton ($2.1 billion), cereals ($1.3 billion), electricity and fuel ($0.6 billion), vehicle parts ($0.5 billion) and machinery and mechanical appliances ($0.4 billion). The country will continue to depend on imports for many essential items.

 

Indian Oil gets Rs 22.81 billion as Air India clears 80 percent of jet fuel dues

Airline operators have cleared all dues pending with Indian Oil, the state-owned firm said. Air India has paid around 80 percent of its pending dues to oil marketing companies. Indian has received Rs 22.81 billion from Air India. The balance settlement is under process for which modalities have been initiated in view of the handing over process of Air India to the Tata group.

Why it’s important: The outlook for India’s aviation business is positive in 2022, with increasing air traffic, increasing fleet in India, opening of new airports, and anticipated entry of upcoming operator Akasa and the revival of Jet Airways.

 

5G services to launch in 13 Indian cities

Commercial 5G services will be rolled out in 13 cities in India in 2022, the department of telecommunications has said. These cities are Delhi, Gurugram, Mumbai, Pune, Chennai, Kolkata, Bengaluru, Hyderabad, Chandigarh, Lucknow, Ahmedabad, Gandhinagar, and Jamnagar. 5G trials are being carried out by Bharti Airtel, Reliance Jio, and Vodafone Idea in the 700 MHz, 3.5 GHz and 26 GHz bands.

Why it’s important: Telecom service providers have demanded that the government keep 5G spectrum prices affordable to enable maximum industry participation. The government is promoting the development of an indigenously developed 5G standard, called the 5Gi, as an alternative to the globally used 3GPP standard.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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