BUSINESS
US Fed's rising rates to cast a cold shadow over Indian indices
The Indian indices survived on the back of very strong performance from the banking sector led by PSU banks, which had a great turnaround year. The composition of the banking sector in NIFTY is about 42 per cent. What does 2023 have in store for the markets is on everyone's mind. The global scenario at present and in India is not the best that one could visualise or hope for. If 2022 was tough, 2023 would be even tougher.
2023 holds little promise for tech IPOs as slowdown continues
Although some IPOs appear to be in the offing this month, the mood among the companies, investors and the public is yet to be lifted after a dismal December. Forty Indian corporates raised Rs 59,412 crore through IPOs in calendar year (CY) 2022, half of the Rs 1,18,723 crore (all-time high) mobilised by 63 IPOs in 2021, according to Prime Database, India's premier database on the primary capital market.
Interest rates to be at higher levels in FY24 as long as inflation is up
"The interest rates will remain at higher levels as it looks unlikely that the Reserve Bank of India (RBI) will cut rates. There is a possibility of another rate hike based on how inflation turns out in the coming month," Madan Sabnavis, Chief Economist, Bank of Baroda told IANS. Sabnavis also said with the US Federal Reserve going for two hikes, the world will be through a phase of higher rates.
Urban discretionary spending slows down even as rural demand weakens
Manufacturing sector contracted for a second straight quarter as demand for manufacturing exports decelerated given the global slowdown. Real GDP growth in FY24 will be in the range of 5.5-6 per cent (vs 7 per cent in FY23), with downside risks, given: (1) urban discretionary demand continues to decelerate along with weak rural demand, (2) private investment remains in the slow lane given rising borrowing costs and sluggish external demand
Startup founders find it difficult to raise funds, investors step back
Amid a deepening funding winter, only 53 per cent of startup founders had a positive fundraising experience (71 per cent of those who attempted to raise) in 2022, down from 92 per cent in 2021. Startup founders expect this year to be challenging, with 58 per cent of founders expecting a tough fundraising environment, according to a recent report by InnoVen Capital, Asia's leading venture debt firm.
Before economy regains pre-Covid trend line, slowdown may be setting in
On a 5 year CAGR trend basis, real GDP is growing at 4 per cent, which is sluggish. The weakness is pronounced in manufacturing (2.7 per cent), whereas services (5 per cent) seems to be doing relatively well. Nominal GDP growth stands at 11 per cent on a trend basis, (similar to pre-Covid trend), aided by higher prices.
Hoping for a High: India's FY24 GDP growth rate predicted in 6-6.5% range
The 4.4 per cent growth (down from 6.3 per cent in the previous quarter) logged during the third quarter of FY23 was predicted by the Reserve Bank of India (RBI) couple of months back while the markets had estimated it at a slightly higher level -- again difference only in the decimal point. In December 2022 announcing the RBI's Monetary Policy Committee's (MPC) decision to hike the repo rate by 35 basis points to 6.25 per cent, Governor Shaktikanta Das said the real GDP growth for FY23 is projected at 6.8 per cent, with Q3 at 4.4 per cent and Q4 at 4.2 per cent.
We have to improve our speed and move in top gear: PM
"Now we have to improve our speed and move in top gear", he said. Noting that PM Gati Shakti Master Plan is a critical tool that integrates economic and infrastructural planning with development, the Prime Minister said, "Gati Shakti National Master Plan is going to change the face of India's infrastructure and its multimodal logistics. Prime Minister Modi made the observation.
Twitter's revenue nosedived 40% in Dec as advertisers left: Report
Several advertisers "ditched the social-media platform following Elon Musk's takeover", the Wall Street Journal reported, citing people familiar with the matter. In an update to investors, Twitter reported a 40 per cent decline (year-over-year) in both revenue and adjusted earnings for December. The company recently made a first interest payment to banks that lent $13 billion.
Adani-Hidenburg Row: Demand for JPC probe is only to embarrass government, says Harish Salve
Talking to NDTV, Salve said that this investigation is crucial as it involves investors' trust and therefore, should be time-bound. He believes that investor confidence has been damaged by market volatility and that it is essential to know quickly what exactly happened to rebuild it. The Adani-Hindenburg row involves some complex financial matters that only subject matter.
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