The market cycle looks vicious, but it has appeared every two-three years – be it in 2013 end, 2015 end or 2009. Dalal Street veteran Manish Gunwani says while this has been a fairly long correction time wise, it has not been so much price wise. A lot of times people have made more money by making allocations to equities in such times. The earnings base is very cheap; the economy and capacity utilisation in a lot of sectors like auto, retail is very low. There is a lot of operating leverage too. As long as one stays away from financial leverage, it is a very good time to add operating leverage.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded 300 points lower at 7 am (IST), indicating a gap-down start ahead for Dalal Street. Elsewhere in Asia, shares sank as panicked investors fled to bonds to hedge the economic shock of the coronavirus.
HERE'S WHAT TO WATCH  | MSCI's broadest index of Asia-Pacific shares outside Japan lost 1.2%, while Japan's Nikkei fell 4.4% and Australia's commodity-heavy market 5%. |
| US stock futures fell by the maximum 5 per cent early Monday as panicked investors fled to bonds to hedge the economic shock of the coronavirus. On Friday, US stocks fell as fears of economic damage from the spread of the coronavirus intensified. Dow slipped 256 points to 25,864, while S&P500 lost 51.57 points, or 1.71 per cent, and the Nasdaq 162 points, or 1.87 per cent. |
| Oil fell by the most since 1991 at 31% on Monday after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak. Brent crude futures fell by as much as $14.25, or 31.5%, to $31.02 a barrel in biggest percentage drop since the start of the first Gulf War . WTI crude fell by as much as $11.28, or 27.4%, to $30 a barrel |
| The rupee resumed its downward journey on Friday, plummeting by 54 paise to 73.87 against the US dollar as coronavirus-panicked investors assessed deteriorating financial markets. |
| WHO'S |  |
KAPOORS IN THE DOCK: YES Bank co-founder Rana Kapoor was arrested in the early hours of Sunday after 30 hours of questioning by the Enforcement Directorate over charges of money laundering to the tune of Rs 4,300 crore. His daughter Roshni was stopped from traveling to London at Mumbai airport later in the day. The federal agency told a special holiday court in Mumbai on Sunday that the money is suspected to have been laundered in a conspiracy involving Kapoor and Kapil Wadhawan of DHFL, a home financier currently under insolvency resolution and also under investigation.
Read More LIC, EPFO MONEY AT RISK… LIC, EPFO and India Postal Insurance are some of the largest longterm investors in Yes Bank bonds worth more than Rs 22,000 crore, which are known as tier-II bonds. A rating downgrade to 'D' or default has raised concerns among those investors, who are now dependent on a revival in the bank's fortunes for a rating upgrade. LIC is estimated to have invested at least Rs 5,545 crore. EPFO, the largest domestic institutional debt investor, is said to have invested about Rs 4,000 crore.
Read More BONDHOLDERS IN DISTRESS… The YES Bank fiasco is keeping large bond investors, financial institutions as well SBI, the hesitant saviour of the failed lender, on tenterhooks. On Sunday, institutional investors reached out to RBI and other financial regulator to point out how the Yes Bank management misled bond holders and kept them in the dark about the bank's declining financials. According to them, the central bank's plan to write down the value of Rs 8,415 crore Additional Tier-1 (AT1) bond — an action that has little or no precedence — would not only hurt the financial markets and capital raising plans of banks but completely go "against the principles of natural justice."
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BIG SUITORS FOR YES BANK… SBI, which needs to come up with equity investment of over Rs 20,000 crore to save Yes Bank from collapse, is in talks with more than half-adozen potential investors, said people with knowledge of the matter. They include Blackstone, Brookfield, Carlyle, TPG, KKR and Goldman Sachs. The state-owned bank is also said to be in talks with Tilden Park, JC Flowers and Cerberus Capital, some of which the previous management had been negotiating with. It could not be ascertained how much each investor is willing to chip in.
Read More BANKS ENCASH MALLYA SHARES… Lender banks to the defunct Kingfisher Airlines owned by former liquor baron Vijay Mallya have recovered another Rs 336 crore by selling shares of United Breweries (UBL) in the open market last week. Top officials close to the development said the shares were sold to recover loans given to the defunct carrier. Officials close to Enforcement Directorate (ED) said there is a focus on recovery and making good as many bad loans as possible. Banks led by SBI had petitioned the court to allow them to take possession of some shares pledged with HDFC Bank because the outstanding loans for which the loans were pledged had been paid off.
Read More Meanwhile... VIRUS HITS SUPPLY CHAIR… As the Covid-19 virus outbreak disrupts supply chains, automakers and manufacturers of electronic goods in India are paying exorbitant rates to fly down spares and components from China and South Korea on chartered flights. Buffer stocks at their facilities have run out and usual transportation modes from the region remain clogged. Many global airlines have all but stopped operating to these countries, making scheduled air transportation of cargo impossible, with chartering the only option.
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