Empirical evidence suggests only once in a blue moon does a stock regain its previous lustre after it is battered down to one-fourth of its value. According to an ICICI Securities study, out of the 250 stocks that lost over 75 per cent of value since CY2010, only 14 have managed to regain previous highs. Between CY13 to CY16, all the 71 names that took such a hit left investors with significant after-burn. How can one expect this round to be different?
STREET PULSE: Where we stand Asian shares paused near multi-month peaks this morning while bonds eked out a bounce amid reports of delay in sealing a preliminary Sino-US trade deal.
HERE'S WHAT TO WATCH  | SGX Nifty traded some 14 points higher at 7 am (IST), signalling a positive start for Dalal Street. MSCI index for Asia-Pacific shares outside Japan was a shade lower, just off a six-month high hit earlier in the week. Japan's Nikkei started in the red, having touched a 13-month top on Wednesday, while South Korean stocks were 0.3% down after hitting their highest since May. |
| Wall Street was underwhelmed by the news of possible delay in Trump-Xi meeting and the Dow ended Wednesday's trade all but flat. The S&P500 gained 0.07% while the Nasdaq dropped 0.29%. |
Oil prices were unchanged on Thursday, holding on to most of their losses from the previous session, on worries that a long-awaited US-China interim trade deal could be delayed. Brent crude futures were flat at $61.74 a barrel, while WTI crude futures slipped 3 cents to $56.32.
Read More The rupee snapped its three-session winning streak and declined 28 paise on Wednesday to close at 70.97 against the US dollar. However, weakening of the US dollar vis-a-vis other currencies overseas and easing crude oil prices restricted the fall.
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Realty Revival Package... The cabinet on Wednesday approved a Rs 25,000 crore special window to provide funding to housing projects that are stuck, with the aim of reviving the key sector, providing a boost to the economy and bringing relief to home buyers. As many as 1,600 projects with 458,000 dwelling units will potentially be covered under the dispensation. The government will contribute Rs 10,000 crore and the rest will come from LIC and SBI besides sovereign wealth funds and pensions funds.
Read More Yes Bank Suitors... Yes Bank is in talks with HDFC Mutual Fund, Aditya Birla Mutual Fund, Farallon Capital, SHG Capital, Carlyle, Discovery Capital and Marshall Wace to raise more than $1.3 billion. While the bank has not received any binding offers, almost all have completed commercial due diligence. Investment interest from these portfolio investors comes over and above a binding bid from a North American family office for a $1.2-billion stake in the bank.
Read More Infy Brings in A Fresh Set of Eyes... Infosys has hired PwC to investigate two whistle-blower complaints alleging financial malfeasance against CEO Salil Parekh and finance chief Nilanjan Roy. The technology giant has already roped in law firm Cyril Amarchand Mangaldas to look into the legal side of the complaints and asked internal auditor EY to probe its revenue recognition practices. Its board on Saturday decided to carry out a probe independent of the other two as it wanted a "fresh set of eyes" to look into the allegations.
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Trump-Xi Date Delay... A meeting between US President Donald Trump and Chinese President Xi Jinping to sign an interim trade deal could be delayed until December as discussions continue over terms and venue. Among various suggestions was to sign a deal after a scheduled NATO meeting in early December. The two sides have been trying to negotiate a limited trade deal that would entail the US dropping some tariffs on Chinese imports in exchange for Beijing resuming purchases of American farm goods and other products.
Read More Deficit Worry… Fitch Solutions has raised India's fiscal deficit forecast to 3.6% of the GDP for this fiscal year, from 3.4% previously, due to weak revenue collections resulting from sluggish economic growth and government's sweeping corporate tax rate cut. Fitch said it was revising the fiscal deficit forecast as revenue collection is likely to fall far short of the projections in the FY2019/20 Union Budget due to weak GST and corporate tax collections.
Read More Meanwhile... Chinese state-owned entities are in talks about investing a combined $5 billion to $10 billion in Aramco's initial public offering, as Saudi Arabia seeks commitments from friendly governments to shore up the record share sale, people with knowledge of the matter said. The Beijing-based Silk Road Fund is among parties that have been in discussions to buy stock in the offering, according to the people, who asked not to be identified because the information is private.
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