Reserve Bank Of India (RBI) may cut rate by 35-40 basis points

MUMBAI: NIFTY made a new lifetime high on Tuesday, November 26, and did so again two days later. Friday saw a sharp correction with the expected weak GDP numbers. The week ended with the BSE SENSEX gaining 434.40 points or 1.08 percent to close at 40,793.81 points, while the NIFTY gained 141.65 points or 1.19 percent to close at 12,056.05 points.

The new lifetime highs made during the week were 41,163.79 points on BSE SENSEX and 12,158.80 points on the NIFTY.

The broader market saw BSE100, BSE200, and BSE500 gain 1.23 percent, 1.36 percent, and 1.38 percent, respectively. The BSE MIDCAP was up 2.35 percent while the BSE SMALLCAP was up 1.55 percent. The Indian Rupee lost 3 paise, or 0.04 percent, to close at Rs 71.74. Dow Jones gained 175.79 points, or 0.63 percent, to close at 28,051.41 points.

November futures expired on a positive note, gaining 273.70 points or 2.30 percent, to close at 12,151.15 points.

GDP for the second quarter (July-September) came in at 4.5 percent. This is the slowest growth in about six years. While the number is poor, it is likely to be the bottom and should rebound in the coming two quarters. This slowdown would also put pressure on the RBI when they meet during December 3-5 for their bi-monthly monetary policy review meet. While a rate cut is expected and the street believes that 25 basis points would be cut from the present 5.15 percent, I strongly believe that it could be more and maybe in the region of 35-40 basis points.

The primary market issue from CSB Bank Ltd received an excellent response and the issue was subscribed 86.93 times with the QIB portion subscribed 62.18 times, HNI 164.68 times and Retail portion subscribed 44.53 times. There were 10 lakh applications.

Ujjivan Small Finance Bank would be open for subscription from December 2-4. The company had done a pre-IPO of Rs 250 crore and is now tapping the capital markets with its primary offering of Rs 750 crore. This comprises of a shareholder reservation of Rs 75 crore for shareholders of Ujjivan Financial Services Ltd. The price band is Rs 35-37. The company has allotted 8.21 crore shares to 18 anchor investors comprising of 33 entities.

The company had begun its operations as a small finance bank a little over 2 years ago. It reported an earning per share (EPS) of Rs 1.20 for the year ended March 2019 against an EPS of Rs 0.05 for the year ended March 2018. The EPS for the six months ended September 2019 has doubled to Rs 1.21 compared to the previous 12 months. The NAV or book value of the share is at Rs 13.84 as of September 30, 2019.

The holding company Ujjivan Financial Services’ shares gained Rs 35.35, or 11.65 percent, to close at Rs 338.85 for the week. The share looks poised to receive a huge response and would do well on the listing. Grey market premium is more than 50 percent of the issue price.

Yes Bank, is to receive a capital infusion of $2 billion from a group of investors. The board would meet on December 10 to allot shares to a group of investors led by Erwin Singh Braich who would be investing $1.2 billion. (IANS)

Also Read: Reserve Bank of India (RBI) imposes penalty on three Co-operative Banks

Also Watch: DGP Kuladhar Saikia officially handed over charge to Bhaskar Jyoti Mahanta in Guwahati