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NEWS U CAN USE
September 25, 2020
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The Week that was…
21
st
Sep to 25
th
Sep
2
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Indian Economy
• Data from the Ministry of Statistics and Programme Implementation showed that the
number of new enrolments under the Employees Provident Fund scheme rose to 6.10 lakh
in July 2020 from 5.38 lakh in the previous month. The number of exited members who
rejoined and resubscribed in Jul 2020 also increased to 5.48 lakh from 5.15 lakh in Jun
2020. However, the number of members who ceased subscribing during the month fell to
3.13 lakh in Jul 2020 from 5.71 lakh in the previous month. As a result, the net enrollments
under the Employees Provident Fund scheme stood at 8.45 lakh in Jul 2020 which is the
highest so far in this fiscal.
• Data from the Ministry of Petroleum & Natural Gas showed that crude oil production
during Aug 2020 stood at 2,577.49 TMT (Thousand Metric Tonnes). This was 6.72% lower
than target for the period and 6.27% lower when compared with the same period of the
previous year. Cumulative crude oil production during the period from Apr to Aug of 2020
was 12886.26 TMT which is 4.19% lower than the target for the period and 6.11% lower
than the production during the corresponding period of the previous year.
• The government has upgraded its foodgrain production target at a record 301 million
tonnes for the 2020-21 crop year. This is higher by 1.5% compared to the output of the
previous year. The upgradation comes due to good monsoon rains and higher acreage in
the kharif season.
3
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4
Domestic Equity Market Indices
Indices 25-Sep-20 1 Week Return YTD Return
S&P BSE Sensex
37,388.66 -3.75% -9.37%
Nifty 50
11,050.25 -3.95% -9.19%
S&P BSE Mid-Cap
14,336.68 -4.73% -4.22%
S&P BSE Small-Cap
14,495.58 -5.26% 5.81%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
21-Sep-20 294 1,639 0.18
22-Sep-20 413 1,476 0.28
23-Sep-20 830 1,048 0.79
24-Sep-20 303 1,574 0.19
25-Sep-20 1,525 350 4.36
Source: NSE
• Indian equity markets settled in the red
for the week. Buying interest waned
with rising coronavirus cases at home
and abroad.
• Market sentiments were also affected
by the passage of a controversial farm
bill by lawmakers in the upper house of
parliament, which triggered protests by
farmers at several places.
• Additionally, delays in fresh U.S.
stimulus stoked worries over the quick
economic recovery from the pandemic.
• Situation worsened following a series
of alerts from the U.S. Federal Reserve
officials about the fallout from the
coronavirus pandemic which kept
investors wary.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
27.39 32.12 488.31 -303.84
P/B
2.80 3.13 2.25 2.06
Dividend Yield
1.04 1.44 1.22 1.13
Source: BSE, NSE Va
lue as on Sep 25, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
17,340.9 -5.99% -3.71%
S&P BSE Bankex
23,815.5 -4.87% -9.16%
S&P BSE CD
22,906.0 -4.88% -1.70%
S&P BSE CG
13,454.8 -3.42% -5.52%
S&P BSE FMCG
10,969.1 -2.83% -6.04%
S&P BSE HC
19,406.3 -4.89% 1.24%
S&P BSE IT
19,787.8 -0.32% 9.01%
S&P BSE Metal
8,095.3 -6.38% -11.28%
S&P BSE Oil & Gas
12,301.2 -6.55% -7.74%
Source:
Refinitiv *Value as on Sep 25, 2020
• On the BSE sectoral front, S&P BSE Realty was
the major loser, down 7.86%, followed by S&P
BSE Oil & Gas and S&P BSE Metal which
slipped 6.55% and 6.38%, respectively.
• Sectors remained low due to fresh worries
over another round of restrictions due to
increase in COVID-19 cases, which could harm
the already sluggish economic recovery.
Indian Derivatives Market Review
• Nifty Oct 2020 Futures stood at 11,042.20, a discount of 8.05 points below the spot closing
of 11,050.25. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 121.45 lakh crore as against Rs. 102.59 lakh crore for the week to Sep 18.
• The Put-Call ratio stood at 0.83 compared with the previous session’s close of 0.91.
• The Nifty Put-Call ratio stood at 1.31 compared with the previous session’s close of 1.37.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.41 3.41 3.43 5.10
91 Day T-Bill
3.39 3.35 3.27 5.05
05.22% 2025, (5 Yr GOI)
5.38 5.41 5.42 --
05.77% 2030, (10 Yr GOI)
6.04 6.01 6.13 --
Source: Refinitiv Value as on Sep 25, 2020
• Bond yields rose after Reserve Bank of
India almost fully devolved a
government security (5.77% GS 2030)
on primary dealers for the third
consecutive auction. Market
participants await borrowing calendar
for second half of FY21 to be
announced by month end.
• Yield on the 10-year benchmark paper
(5.77% GS 2030) rose 3 bps to close at
6.04% compared to the previous
week’s close of 6.01% after moving in
a range of 5.98% to 6.04%.
• The rate of interest on Government of
India Floating Rate Bonds, 2033 (GOI
FRB 2033) applicable for the half year
Sep 22, 2020 to Mar 21, 2021 shall be
4.70% per annum.
Domestic Debt Market
5.92
6.00
6.08
21-Sep 22-Sep 23-Sep 24-Sep 25-Sep
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.83 5.66 183
3 Year 5.04 5.89 85
5 Year 5.46 6.74 128
10 Year 6.13 7.10 97
Source: Refinitiv Value as on
Sep 25, 2020
• Yields on gilt securities rose across
maturities by up to 7 bps barring 4- to 7-, &
11-year papers that fell by up to 5 bps and
3-year paper that stood steady.
• Corporate bond yields fell across
maturities in the range of 2 bps to 54 bps
barring 4-, 5- & 15-year papers that fell by
up to 12 bps and 10-year paper that stood
steady.
• Difference in spread between AAA
corporate bond and gilt expanded across
maturities in the range of 2 bps to 47 bps
barring 4-, 10- & 15-year papers that
contracted by either 2 bps or 15 bps.
Domestic Debt Market (Spread Analysis)
-6
5
16
3.10
5.10
7.10
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 25-Sep-20 18-Sep-20
Yield in %
Change in
bps
Source: Refinitiv
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8
• The government has increased the Minimum Support Prices (MSPs) for all mandated Rabi
crops for marketing season 2021-22. MSP for wheat has been increased by Rs. 50 per quintal
to Rs 1,975 per quintal while that for barley has been hiked by Rs. 75 per quintal to Rs 1,600
per quintal. The highest increase in MSP was announced for lentil which was increased by Rs.
300 per quintal followed by gram and rapeseed & mustard whose price was increased by Rs.
225 per quintal and safflower whose price was increased by Rs. 112 per quintal.
• Capital market regulator Securities and Exchange Board of India (SEBI) prescribed an
Alternate Risk Management Framework (ARMF) to protect investors in case of near
zero/negative prices in commodities or their futures. SEBI added that clearing corporations
need to ensure that their systems are ready to implement the ARMF within 60 days.
• According to the SEBI chief, guidelines would soon be issued that would mandate all debt
mutual fund schemes to hold a certain percentage of liquid assets in their schemes which
would include treasury bills and government securities. The objective of the move is to help
improve the liquidity of the debt mutual fund schemes and meet sudden redemption
pressures.
• SEBI has decided to give time till Jan 1, 2021 to trustees of asset management companies
(AMCs) for appointing a dedicated officer who will monitor various activities of AMCs. The
trustees were earlier required to appoint a dedicated officer by Oct 1, 2020 to assist the
AMCs in their work.
Regulatory Updates in India
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9
• According to SEBI, registered investment advisors (RIAs) can charge a maximum fee of up
to Rs. 1,50,000 per annum per client across all of the services. As a percentage of assets
under advice, they can charge 2.5%. Also, existing clients can opt for either the advisory or
distribution services of the RIA at a group or family level. However, clients cannot be
forced to redeem existing assets under advisory or distribution.
• SEBI rationalised the disclosure requirements and eligibility criteria for rights issue. The
objective of the move is to make fundraising faster, easier and cost effective. The
threshold limit for filing requirement of rights issue draft letter of offer with the board for
its observations has been increased from Rs. 10 crore to Rs. 50 crore. SEBI further added
that mandatory 90% minimum subscription criteria for rights issue shall not be applicable
where the objective of the issue is financing other than capital expenditure for a project.
However, this will be applicable provided that the promoters undertake to subscribe fully
to their portion of rights entitlement.
• The Parliament passed the Essential Commodities (Amendment) Bill, 2020 under which
commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes were removed
from the list of essential commodities. The objective of the move is to create a positive
environment for consumers, investors and farmers and allay concerns among private
investors regarding excessive regulatory interference in their business operations. The
legislation is expected to bring in price stability, prevent wastage of agri produce, create a
competitive market environment and bring in more investment.
Regulatory Updates in India (contd..)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
• According to a report released by the National Association of Realtors, U.S. existing home
sales rose 2.4% to an annual rate of 6.000 million in Aug 2020 compared with a surge of
24.7% to a rate of 5.860 million in Jul 2020. Existing home sales rose to their highest level
in nearly 14 years.
• According to the Commerce Department report new home sales in the U.S. surprisingly
rose strongly by 4.8% to an annual rate of 1.011 million in Aug 2020, slower than 14.7%
surge to an upwardly revised rate of 965,000 (901,000 originally reported) in Jul 2020.
New home sales rose to their highest level since Sep 2006.
• The Labor Department report showed initial jobless weekly claims in the U.S. rose 4,000 to
870,000 in the week ended Sep 19 from the previous week's revised level of 866,000
(860,000 originally reported).
• Survey results from the ifo Institute showed, Germany’s business confidence index went up
to 93.4 in Sep 2020 from 92.5 in Aug 2020. The index rose to its highest level since Feb
2020 as the economy showed signs of stabilization despite rising number of coronavirus
infection.
• Flash survey data from IHS Markit showed, the euro area composite output index fell to
50.1 in Sep 2020 from 51.9 in Aug 2020. While manufacturing output growth accelerated
to the fastest since Feb 2018, services recorded the largest contraction of output since
May 2020.
10
Global News/Economy
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11
Global Indices
Indices
25-Sep-20
1-Week
Return
YTD
Return
Russell 3000 1,702.08 1.17% 19.36%
Nasdaq 100 11,151.13 1.96% 27.69%
FTSE 100 5,842.67 -2.74% -22.54%
DAX Index 12,469.20 -4.93% -5.89%
Nikkei Average 23,204.62 -0.67% -1.91%
Straits Times 2,472.28 -1.02% -23.29%
Source: Refinitiv Value as on Sep 25, 2020
U.S.
• U.S. markets managed to cut losses for
the week on the back of a rally in
technology shares. However, rising
worries about surging coronavirus cases
in several countries across Europe kept
market sentiments subdued. Markets
were further hit after U.S. Federal
Reserve officials made a series of
warnings about the fallout from the
coronavirus pandemic.
Europe
• European markets fell on worries about a second wave of coronavirus across the region
and growing uncertainty about the pace of economic recovery. Uncertainties surrounding
the U.S. presidential elections and the U.S. stimulus package further weighed on
sentiment.
Asia
• Asian markets closed in the red with investors maintaining cautious stance on U.S. fiscal
stimulus negotiations. Worries over a surge in novel coronavirus cases across Europe also
weighed on markets.
Global Equity Markets
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12
• U.S. Treasury prices rose initially during
the week under review amid concerns
over a second wave of the COVID-19
pandemic and growing possibility of
new coronavirus-driven lockdowns.
• Worries about the global economic
recovery and a surge in novel
coronavirus cases across Europe also
contributed to the upside.
• Gains were extended as the safe-haven
appeal of U.S. Treasuries improved due
to rising uncertainty over the upcoming
U.S. Presidential elections.
• U.S. Treasury prices rose further after
initial jobless claims in U.S. increased for
the week ended Sep 19, 2020 which led
to worries over the U.S. labour market.
Global Debt (U.S.)
0.65
0.66
0.67
0.68
21-Sep 22-Sep 23-Sep 24-Sep 25-Sep
Yield in %
US 10-Year Treasury Yield Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
40.83 41.97
Gold ($/Oz)
1,860.05 1,949.69
Gold (Rs/10 gm)
49,589 51,619
Silver ($/Oz)
22.86 26.77
Silver (Rs/Kg)
57,323 65,454
Source: Refinitiv *Value as on Sep 25, 2020
Gold
• Gold prices dipped with dollar extending
gains amid concerns over weakening
economic growth and uncertainty over
U.S. stimulus package.
Brent Crude
• Brent crude prices fell due to persisting
concerns over COVID-19 pandemic after
Britain, Germany and France imposed
new restrictions to stem the spread of
the novel coronavirus. The downturn
was restricted after data from the
Energy Information Administration
showed that crude oil inventories in U.S.
fell by 1.6 million barrels in the week
ended Sep 18, 2020.
Baltic Dry Index
• The index rose amid improving capesize
and panamax activities.
Commodities Market
7.80
9.50
11.20
25-Aug-20 4-Sep-20 14-Sep-20 24-Sep-20
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Source: Refinitiv
Global Commodity Prices
Rebased to 10
Commodity Movement
-4.60%
-2.72%
-14.59%
25-Sep-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
73.73 73.30
Pound Sterling
94.06 95.06
EURO
86.04 86.88
100 Yen
70.00 69.93
Source: Refinitiv Figures in INR , *Value as on Sep 25, 2020
Rupee
• The rupee weakened against the
greenback following losses in the
domestic equity market amid mounting
concerns over the COVID-19 pandemic.
Euro
• The euro weakened against the U.S.
dollar as increase in coronavirus infection
cases in Europe fuelled concerns of a
slowdown in global growth.
Pound
• The pound weakened against the
greenback amid concerns over a second
wave of the COVID-19 pandemic in U.K.
Yen
• The yen weakened against the
greenback as concerns over a second
wave of the COVID-19 pandemic
boosted the safe-haven appeal of the
greenback.
Currencies Markets
9.50
9.85
10.20
25-Aug-20 4-Sep-20 14-Sep-20 24-Sep-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-1.06%
0.59%
0.10%
-0.97%
25-Sep-20
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15
The Week that was…
21
st
Sep to 25
th
Sep
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16
The Week that was (Sep 21 – Sep 25)
Date Events Present Value Previous Value
Monday,
September 21, 2020
• China PBoC Interest Rate Decision 3.85% 3.85%
• U.S. Chicago Fed National Activity Index (Aug) 0.79 2.54
Tuesday,
September 22, 2020
• U.K. CBI Industrial Trends Survey –
Orders (MoM)(Sep)
-48% -44%
• U.S. Richmond Fed Manufacturing Index (Sep) 21.00 18.00
Wednesday,
September 23, 2020
• Japan Jibun Bank Manufacturing PMI (Sep) (P) 47.30 47.20
• Germany Markit Manufacturing PMI (Sep) (P) 56.60 52.20
• Euro Zone Markit Manufacturing PMI (Sep) (P) 53.7 51.70
• U.K. Markit Manufacturing PMI (Sep) (P) 54.3 55.20
• U.S. Markit Manufacturing PMI (Sep) (P) 53.5 53.10
• Germany Markit Services PMI (Sep) (P) 49.10 52.50
• Euro Zone Markit Services PMI (Sep) (P) 47.60 50.50
• U.K. Markit Services PMI (Sep) (P) 55.1 58.80
• U.S. Markit Services PMI (Sep) (P) 54.6 55.00
Thursday,
Septemberp 24, 2020
• Germany IFO – Business Climate (Sep) 93.4 92.60
• U.S. Initial Jobless Claims (Sep 18) 870 K 866 K
• U.S. Kansas Fed Manufacturing Activity (Sep) 18.00 23.00
Friday,
September 25, 2020
• U.S. Durable Goods Orders (Aug) 0.4% 11.7%
• U.K. Gfk Consumer Confidence (Sep) -25.00 -27.00
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
28
th
Sep to 2
nd
Oct
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18
Day Event
Monday,
September 28, 2020
• Japan Leading Economic Index (Jul)
• U.S. Dallas Fed Manufacturing Business Index (Sep)
Tuesday,
September 29, 2020
• Euro Zone Business Climate (Sep)
• Japan Industrial Production (MoM) (Aug) (P)
Wednesday,
September 30, 2020
• China Caixin Manufacturing PMI (Sep)
• U.K. Gross Domestic Product (QoQ)(Q2)
• U.S. Gross Domestic Product Annualized (Q2)
• U.S. ADP Employment Change (Sep)
Thursday,
October 1, 2020
• U.S. Markit Manufacturing PMI (Sep)
• Euro Zone Markit Manufacturing PMI (Sep)
• U.K. Markit Manufacturing PMI (Sep)
• Japan Jibun Bank Manufacturing PMI (Sep)
• U.S. Initial Jobless Claims (Sep 25)
Friday,
October 2, 2020
• U.S. Nonfarm Payrolls (Sep)
• U.S. Unemployment Rate (Sep)
• U.S. Factory Orders (MoM) (Aug)
• U.S. Average Hourly Earnings (YoY) (Sep)
The Week Ahead
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The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry and
markets which have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot be
considered as guidelines, recommendations or as a professional guide for the readers. It may be noted that since Nippon Life India Asset
Management Limited (NAM India) (formerly Reliance Nippon Life Asset Management Limited) has not independently verified the accuracy or
authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been
processed or arrive data; NAM India does not in any manner assures the accuracy or authenticity of such data and information. Some of the
statements & assertions contained in these materials may reflect NAM India’s views or opinions, which in turn may have been formed on the basis of
such data or information. The Sponsor(s), the Investment Manager, the Trustee or any of their respective directors, employees, affiliates or
representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such data or information.
Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and
opinions given are fair and reasonable, to the extent possible. This information is not intended to be an offer or solicitation for the purchase or sale
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representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on
account of lost profits arising from the information contained in this material.
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19
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