Most PSUs are now value bets on Dalal Street; they offer solid dividend yields, have good cash flows and log better growth rates than others. While all of that qualifies them for premium valuations, what keeps investors away is the looming supply of fresh paper. As Mahesh Patil of Birla Sun Life AMC puts it, "No matter at what price you buy it, there is supply coming in at a lower level." The solace, if any, is that things can still catch up when one gets a dividend yield higher than bond yields. Maybe, a clearer disinvestment agenda can do them some good.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded nearly 100 points down at 7 am (IST), signalling a possible meltdown ahead on Dalal Street. Elsewhere in Asia, share markets slipped and oil prices fell, struggling to find a footing as the rapid global spread of the coronavirus left investors on edge and seeking safety in gold and bonds.
HERE'S WHAT TO WATCH  | MSCI's broadest index of Asia-Pacific shares outside Japan . traded either side of flat. Australia's S&P/ASX 200 was down 0.5%, for a loss of more than 6% this week so far. Japan's Nikkei fell 1.4% |
| Overnight on Wall Street, the Dow Jones fell almost half a percent and the S&P500 0.4% - a slowdown from consecutive days of 3% drops that have put the indices underwater for the year so far. However, Nasdaq Composite added 15.16 points, or 0.17%, to end at 8,980. |
| US crude made a fresh one-year low of $48.17 a barrel in Asian trade on Thursday after slipping below $50 on Wednesday to its lowest since January 2019, as Asia, Europe and oil-producing countries in the Middle East reported hundreds of new coronavirus cases. |
| Extending gains for the second day, the rupee on Wednesday rose by 20 paise to settle at 71.65 against the US dollar in line with other Asian currencies, helped by lower crude oil prices. |
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DIVIDEND FESTIVAL… Companies are rushing to pay dividends to shareholders before the new budget proposal, which makes dividend income taxable up to 43% in the hands of the recipient, takes effect from April. So far, 204 companies have announced dividends since February 1, compared with 90 during the similar period in 2019 and 98 in 2018. The boards of 32 more companies are meeting in the next three days to decide on the dividend. The Bajaj Auto board has declared an interim dividend of 1,200% or Rs 120 per share. Shree Cement has announced an interim dividend of 1,100%. Symphony has declared a special dividend of 900%, among others.
Read More BIG BULL'S BIG BID… Rakesh Jhunjhunwala's RARE Equity, HDFC Life Insurance and ICICI Prudential Life Insurance have been shortlisted from amongst a list of suitors who have submitted proposals to acquire a significant stake in IDBI Federal Life Insurance, reviving a transaction that had been shelved two years ago due to uncertainty over the ownership of the life insurers loss-making parent, IDBI Bank, according to people aware of the matter. The three bidders have bid for up to 74% stake in the life insurance company, valuing it at between Rs 2,400 crore and Rs 3,000 crore.
Read More PURI SUCCESSOR… HDFC Bank Managing Director Aditya Puri said his vision for the successor at the most successful lender in the country is aligned with that of HDFC group companies' elder statesman Deepak Parekh, squelching speculation that they had differences over the succession process. "In all fairness, Deepak and I have no differences," Aditya Puri told ET in an interview. "We all want the best person in the organisation. He hasn't even discussed the subject with me… I don't know for how many months."
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FPIs RUSH FOR EXIT… Foreign investors are rushing out of Dalal Street amid growing aversion to riskier assets in the wake of rapid global spread of the Covid-19 virus. The domestic stock market extended losses to the fourth day on Wednesday as FPIs stepped up sale of Indian shares, which dragged Sensex to close below 40,000 for the first time since October. FPIs offloaded shares worth Rs 3,337 crore on Wednesday, taking their total sales to over Rs 6,900 crore in three days. Had domestic institutions not bought shares worth Rs 2,786 crore, the losses would have been sharper.
Read More VODA IDEA PLEA… Vodafone Idea has called on the government to allow it to pay adjusted gross revenue (AGR) dues over 15 years. The telecom company has also asked for a tax refund, cuts in licence fees and spectrum usage charges (SUC) and the establishment of a floor for tariffs among measures to help remain viable. In a letter to the DoT, the Finance Ministry and Niti Ayog, the telco, which has over 300 million subscribers, said it needs help from the government to stay in business.
Read More CORP DEPOSIT RATES FALL… Investors who are big savers in corporate fixed deposits are in for some disappointment. Various companies have slashed their deposit rates by 20-45 basis points following the cut in rates by the country's largest lender State Bank of India. While Bajaj Finance will reduce its rates by 25-40 basis points (bps) in the first week of March, Mahindra Finance and PNB Housing Finance have already reduced their deposit rates by 15-45 bps earlier this month.
Read More Meanwhile... FLAT GDP GROWTH… India's economy is likely to have grown at the same pace as in the third quarter at 4.5%, most independent economists said, though others expect growth to be a tad faster, based on a slight pickup in agriculture and government spending. "Our composite leading indicator (index of 33 major leading indicators) suggests that gross domestic product growth to remain flat at 4.5% as in Q3 of FY20," said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India. India's economic growth slipped to a 26-quarter low of 4.5% in July-September from 5% in the first quarter.
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