Tuesday, November 30, 2021
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Listen In: Will ESG concerns return to haunt ITC investors? | The Economic Times Podcast

Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let’s start with the headlines first.

– DoT gearing up for another mega spectrum sale
– Bookings up in many hotels
– Bank deposits rise 12 per cent in FY21
– Fidelity may lead Meesho’s new $550-600M funding round

Now lemme give you a quick glance on the state of the markets.

Dalal Street is likely to have a positive start this morning. Nifty futures on the Singapore Exchange traded 19 points higher at 8:20 hours (IST). Asian stock markets were trading mostly lower today, as investors nervously await developments on the fate of troubled Chinese property giant Evergrande. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.16 per cent.

Elsewhere, the yield on 10-year Treasuries dipped about one basis point to 1.42%. The dollar wallowed near its lowest level in a week versus major peers on Friday, as improved risk sentiment wiped out recent gains amid easing concerns about contagion from a potential China Evergrande Group default. Oil prices rose for a fourth day, taking Brent towards three-year highs, as investors focused on tighter supplies amid strong appetite for riskier assets like crude and high hopes for recovery from the pandemic. Brent crude was up 40 cents, or 0.5 per cent at $77.65 a barrel.


That said, here’s what is making news.

A day after academician Aswath Damodaran’s blog decried ESG investing of costing money to companies and their investors, ITC made its first sudden up-move and has since gained nearly 13% over a week. The emergence of ESG investing — the principle of responsible investing in companies that are following environmental, social and governance norms — was one of the reasons that was impacting ITC’s performance on the bourses irrespective of the company’s performance on the ground. Now, with the stock showing signs of sustaining the uptrend, analysts have been quick at revising the company’s stock price upwards. With people stepping out of their homes, sale of cigarette is expected to increase and so is overall consumption of products — providing reasons for the ITC stock to react positively.

Brick-and-mortar is slowly emerging from the shadows of virtual sheen, as cuts in stamp duty and financing rates by top lenders such as HDFC, Kotak Mahindra and State Bank of India fuel a rally in property stocks. Godrej Properties, Oberoi, Puravankara and DLF rallied more than 10% on Thursday, while the Nifty Realty index jumped as much as 9%. The Indian real estate market is regaining the confidence of even global institutional investors, and they see good opportunities in both equity and debt investments. Godrej Properties, Oberoi, Puravankara and DLF are among top picks of brokerages. Shares of Godrej Properties rallied 34% last week, while DLF and Sunteck Realty gained 17% and 11%, respectively.

Most investors have held on to their investments in Sovereign Gold Bonds despite recently getting an opportunity to exit after staying invested for five years. The Reserve Bank of India gives Sovereign Gold Bond investors an option to redeem after five years. Gold bonds of four series launched in 2015 and 2016 came up for repurchase in recent months. But RBI data show that in the first two series about 2% of the bonds issued came back for repurchase. In the third and fourth series, only 0.5-0.6% of the investments were redeemed.


Traders are seeing hints that India’s central bank is seeking to drain record liquidity from the banking system, another sign that the global flood of pandemic-era easy money may begin to ease. The Reserve Bank of India is increasingly shifting its forex intervention to the forwards market to keep from injecting rupee liquidity, according to traders and economists, including Madhavi Arora of Emkay Global Financial Services Ltd. The monetary authority is also signaling a taper to its outright bond purchases, or even do away with them totally, from next quarter, some of them said.


NOW Before I go, here is a look at some of the stocks buzzing this morning…

IIFL Finance on Thursday said it is planning to raise up to Rs 1,000 crore through issuance of non-convertible debentures (NCDs) of various maturity. The company will issue NCDs aggregating to Rs 100 crore, with a green-shoe option to retain oversubscription up to Rs 900 crore.

Reliance Jio consolidated its leadership in rural India, adding 3.48 million users in those markets in July, while Vodafone Idea (Vi) and Bharti Airtel lost 0.99 million and 0.41 million customers respectively in these geographies, according to latest subscriber data issued by the Telecom Regulatory Authority of India (Trai) on Thursday.

Yes Bank, the largest shareholder of Dish TV India Ltd, has asked the satellite television service provider to hold an extraordinary general meeting (EGM) of shareholders and act on its recommendations to reconstitute the company’s board.

Jubilant Foodworks Ltd (JFL), a quick service restaurants operator and master franchise of brands such as Domino’s Pizza and Dunkin’ Donuts, on Thursday said it has acquired a 25 per cent stake in Gurugram-based nutrition company Wellversed Health.


Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay with us for all the market news through the day. Happy investing!

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