- The week’s highlight was the news from banking sector. While SBI initiates process for merger of its associate banks, PNB shocks with more than Rs 5,000 crore loss in Q4’ 16.
- Other than PNB, four other PSBs, IDBI Bank, Syndicate Bank, Corporation Bank and UBI declared their results this week. All four have reported significant losses hit by provisioning of Rs 4,450 crore, Rs 2,400 crore, Rs 1,960 and Rs 1,200 crore respectively during the quarter. All eyes now on SBI which is scheduled to declare its results next week.
- In yet another development from banking sector, foreign bankers appear to be reorienting their India strategy. While HSBC announced its plan to reduce its retail banking branches to nearly half, RBS (Royal Bank of Scotland) says it has started the process of retail branch closure as part of its plan to exist banking operations announced earlier.
- Government seems to have declared an all out war on black money even if it causes pain in the short term. SEBI brings about stringent rules on issue of Participatory notes (P-notes) to curb misuse of the route, allegedly for bringing unaccounted money. It seems that market has also resigned to its fate since there was no knee jerk reaction from the market like seen during the last attempt to bring such rules.
- WPI based inflation rose by 0.34% in April reversing the trend of 17 months of decline. Food prices have risen by 6.3% against 5.2% in March which reduces the room for a rate cut. The inflationary pain in food articles, it appears, will continue to remain for a few more months till monsoon.
- Apply CEO Tim Cook reaches India amidst much publicity. Among the agenda is his plan to push the sale of refurbished iphones in India. Apple has only 2% market share in India which has a huge appetite for smart phones, primarily due its pricing. The refurbished phones would bring down the price to about Rs 10,000 helping it reach a much larger market.
- The assembly election results across five states declared. Congress looses Kerala and Assam but records win in Puducherry with a slender margin. BJP enters North-east with a majority in Assam. Jayalalita and Mamta Banerjee retain their respective states beating anti incumbency. The results, along with the upcoming Rajya Sabha election, should certainly help government push through some more reform measures.
- International – Japan escapes recession recording a growth of 1.7% in GDP after a contraction at the same rate in Dec’15 quarter. Gains have come from government and consumer spending as business investment recorded a decline. Further, a good part of it is being attributed to the leap year effect which gives an extra day to work..!
(Image courtesy of ddpavumba at FreeDigitalPhotos.net)