Wednesday, August 5, 2020

Current trend expected to stay

The Covid-19 pandemic still seems far from peaking out, as the number of cases continued to rise across the world. While market seems to be in a consolidation mode with the momentum slowing down in the last couple of days. This trend is expected to stay such since the Covid-19 uncertainties continue.


OPEC is planning on reversing some of the output cuts initiated earlier this year heading into August, and any impact of this on crude prices will be another factor to watch. The Reserve Bank of India is likely to leave the repo rate unchanged in the forthcoming money policy due on 6th August 2020.


The sales percentage has increased in the midst of the Covid-19 pandemic as customers prefer personal mobility over public transport. July auto sales numbers showed a solid bounce back. Top industry players seem to be leading the sector’s crawl back to normalcy amid an easing coronavirus lockdown. More than 250 companies will announce their financial results next week for the quarter ended 30th June 2020.

 

The benchmark RSS4 grade rubber closed at `.132.50 a kg at Kottayam, while RSS3 grade closed at `.121.42 a kg at Bangkok and Malaysian SMR20 closed at `.93.95 a kg. On ICEX August 2020 futures closed at `.133.94 a kg, September at `.131.00, October at `.134.37, November at `.135.71, December at `.137.07 and January 2021 closed at `.138.43 a kg.

 

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Wednesday, May 27, 2020

GDP growth seen at 1.2% for Q4


The Reserve Bank of India Governor, Shaktikanta Das, last week, announced that the economy is going to contract in the current fiscal. He refrained from putting out a figure but said that growth impulses could strengthen in the latter half of the current fiscal.

India’s gross domestic product (GDP) is estimated to have grown at 1.2% in the last quarter of 2019-20 as economic activity came to a standstill in the last week of March 2020 due to the nationwide lockdown to contain spread of Covid-19. While according to the SBI’s research report, the loss of at least Rs.1.4 lakh crore during those seven days of lockdown and the GDP growth is likely to be 4.2% for 2019-20.

The fourth quarter GDP growth number for 2019-20 will be announced by the National Statistical Office (NSO) on 29th May 2020.

In the third quarter of 2019-20, GDP growth slipped to a nearly seven-year low of 4.7%. In Q1 and Q2, GDP growth was 5.1% and 5.6%, respectively. Subsequently, the annual 2019-20 GDP growth would be around 4.2% as compared to 5% as it was projected earlier, the report said.

While ICRA has estimated that the Indian economy will grow by 1.9% in the January-March period while for the entire fiscal (2019-20), it projects a growth rate of 4.3%. This is in stark contrast to a growth of 6.1 per cent registered in 2018-19. Similarly, CRISIL has also forecast the economic growth for January-March quarter to come in at a dismal 0.5% while it estimates 2019-20 growth at 4%.

The benchmark RSS4 grade rubber closed at `.115 a kg at Kottayam, while RSS3 grade closed at `.106.95 a kg at Bangkok and Malaysian SMR20 closed at `.84.92 a kg. On ICEX June 2020 futures closed at `.117.39 a kg, July at `.117.48, August at `.116.92, September at `.118.11, October at `.119.29 and November closed at `.120.48 a kg. Tokyo Commodity Exchange June 2020 futures series closed at ¥137.8 a kg, July at ¥143.5, August at ¥147.2, September at ¥149.5, October at ¥152.2 and the contract for delivery in November 2020 closed at ¥154 a kg.

To read Rubber4U – 1st June 2020 issue: http://rubber4u.com/Public/Abcd.pdf

Saturday, April 18, 2020

Ensure strict compliance of lockdown


India’s Prime Minister Narendra Modi had announced the extension of nationwide lockdown till 3rd May to contain the spread of Covid-19. The Centre in its revised guidelines has allowed certain relaxations in the notified services from 20th April in areas without Hotspots. A series of directives have been put in place to ensure a strict compliance of lockdown.

The Ministry of Home Affairs came out with some guidelines about what activities have been allowed and what will remain restricted. The ministry added that State and union territory governments shall not dilute lockdown guidelines in any manner, but they may impose stricter measures as per local requirements. The exemptions given will not be applicable to the hotspots. Now, wearing a mask will be mandatory across the nation.

The front-month contract in West Texas Intermediate, the New York-traded benchmark for U.S. oil, plunged to as low as $17.31 per barrel on 17th April, marking a bottom since 2001, as it headed for delivery. The contract settled at $18.27, down 8% on the day and 18.5% on the week. While Brent, the London-traded global benchmark for crude, performed better than US crude on Friday. Brent’s front-month, which has already moved to June, settled at $28.08 per barrel, up almost 1% on the day and 11.5% on the week.

There were no transactions for benchmark RSS4 grade rubber at Kottayam due to lockdown, while RSS3 grade closed at `.104.46 a kg at Bangkok and Malaysian SMR20 closed at `.86.38 a kg. On ICEX May 2020 futures closed at `.109.87 a kg, June at `.110.36, July at `.114.64, August at `.115.78, September at `.118.14 and October closed at `.119.32 a kg. Tokyo Commodity Exchange April 2020 futures series closed at ¥143.5 a kg, May at ¥142.9, June at ¥145.5, July at ¥149.3, August at ¥151.2 and the contract for delivery in September 2020 closed at ¥153.9 a kg.

To read Rubber4U – 1st May 2020 issue: http://rubber4u.com/Public/Abcd.pdf

Saturday, February 1, 2020

Budget 2020-21 Highlights related to industry

Indian Finance Minister Niramala Sitharaman today presented Union Budget 2020-21 in the Lok Sabha and introduced a new optional personal income tax system and announced multi-billion dollar farm, infra and healthcare package to revive growth in the country. Finance Minister, Nirmala Sitharaman said the budget is to boost the income and purchasing power of people. Finance Minister moots 16-point action plan to boost agriculture and farmers welfare.

The minister proposed raising customs duty on a variety of products ranging from tableware and kitchenware, electrical appliances to footwear, furniture, stationery and toys to give a level playing field to domestic companies and boost 'Make in India'. 

A scheme will be introduced to provide subordinate debt to MSME entrepreneurs. The government has also asked the Reserve Bank to extend the Debt Restructuring window for micro, small and medium enterprises by a year to 31st March 2021, in measures aimed at imparting a thrust to the MSME sector. Government plans to amend the Companies Act to decriminalise civil offences.

New income tax slabs proposed
-10% income tax between `.5-7.5 lakh
-15% income tax for income between
`.7.5-10 lakh vs 20% earlier
-20% income tax for income between
`.10-12.5 lakh vs 30% earlier
-Over
`.15 Lakh, continue to be 30%
The new tax regime shall be optional for taxpayers. 

A simplified GST return shall be implemented from the 1st April, 2020. It will make return filing simple with features like SMS based filing for nil return, return pre-filling, improved input tax credit flow and overall simplification. Dynamic QR-code is proposed for consumer invoices. GST parameters will be captured when payment for purchases is made through the QR-code.

Imports under Free Trade Agreements are on the rise. Undue claims of FTA benefits have posed threat to domestic industry. In the coming months, Rules of Origin requirements shall be reviewed, particularly for certain sensitive items, so as to ensure that FTAs are aligned to the conscious direction of our policy.

To boost the economic growth, higher spending on infrastructure, rural development and agri sector were announced. Finance Minister hiked the fiscal deficit target for current fiscal to 3.8% of GDP, from 3.3%. For 2020-21, fiscal target seen at 3.5% of GDP. Nominal GDP growth for 2020-21 estimated at 10%.

The benchmark RSS4 grade rubber closed at `.135 a kg at Kottayam, while RSS3 grade closed at `.109.18 a kg at Bangkok and Malaysian SMR20 closed at `.97.35 a kg. On ICEX February 2020 futures closed at `.132.14 a kg, March at `.133.95, April at `.137.50, May at `.140.24, June at `.141.64 and July closed at `.143.05 a kg. Tokyo Commodity Exchange February 2020 futures series closed at ¥161.9 a kg, March at ¥173.8, April at ¥179.3, May at ¥179.4, June at ¥180 and the contract for delivery in July 2020 closed at ¥181.2 a kg.

To read Rubber4U – 1st February 2020 issue: http://rubber4u.com/Public/Abcd.pdf
For National Rubber Policy: http://rubber4u.com/Public/NRP2019.pdf