Goldman Sachs Group sells over $10-billion stocks in block trades
NEW YORK, March 28: As Wall Street speculated on the identity of the mysterious seller behind the massive $10.5 billion in block trades executed by Goldman Sachs Group, investors also pondered just how unprecedented the selloff was — and whether there’s more to come.
The sales lit up trader chat rooms from New York to Hong Kong and were part of an extraordinary spree that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to US media conglomerates.
Goldman sold $6.6 billion worth of shares of Baidu, Tencent Music Entertainment Group and Vipshop Holdings Ltd. before the market opened in the U.S., according to an email to clients seen by Bloomberg News. That move was followed by the sale of $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch, iQiyi Inc. and GSX Techedu Inc., the email said.
Block trades — the sale of a large chunk of stock at a price sometimes negotiated outside of the market -- are common, but the size of these trades and the multiple blocks hitting the market during the normal trading hours aren’t.
“This was highly unusual,” said Oliver Pursche, a senior vice president at Wealthspire Advisors, which manages $12 billion in assets. “The question now is: Are they done? Is this over? Or come Monday and Tuesday, are markets going to be hit by another wave of block trades?”
The trades triggered price swings for every stock involved in the high-volume transactions, rattling traders and prompting talk that a hedge fund or family office was in trouble and being forced to sell.
The situation is worrisome “because we don’t have all the answers on whether this was the liquidation of just one fund or more than a fund, or whether it was a fund liquidation to begin with and the reason behind it,” Pursche said.
“It can be difficult for a manager from a positioning standpoint. Another wave of block trades may force fund managers to reassess their commitment to some stocks,” he said.
Frederik Hildner, a portfolio manager at Salm-Salm & Partner GmbH in Wallhausen, Germany, called the move “unprecedented.” He added, “The question is why did these block trades occur? Does one firm know something others don’t or were they somehow forced to cut risk?
More of the unregistered stock offerings were said to be managed by Morgan Stanley, according to people familiar with the matter, on behalf of one or more undisclosed shareholders. Some of the trades exceeded $1 billion in individual companies, calculations based on Bloomberg data show.
Wall Street is now trying to work out who the seller is.
Several major investment banks with ties to hedge fund Archegos Capital Management LLC liquidated holdings, contributing to the slump in share prices of ViacomCBS and Discovery, IPO Edge reported, citing people it didn’t identify. CNBC reported forced sales by Archegos were probably related to margin calls on heavily leveraged positions. Archegos is controlled by former Julian Robertson protege and Tiger Management analyst Bill Hwang.
Maeve DuVally, a Goldman Sachs spokeswoman, declined to comment. A spokesperson for Morgan Stanley declined to comment. A person reached at Archegos’s New York office on Friday declined to comment. An email sent to Hwang seeking comment wasn’t returned.
India's foreign exchange reserves surpass Russia's, become world’s fourth biggest
NEW DELHI, March 14: The foreign exchange reserves of India surpassed Russia's and became the world's fourth largest.
The foreign exchange reserves of both India and Russia have declined after months of rapid increase. However, India pulled ahead as Russian holdings declined at a faster rate in recent weeks and the Reserve Bank of India continued to hoard dollars to cushion the economy against any sudden outflows.
RBI remains net buyer of US dollar in December, buys $10.014 billion
On March 13, the RBI said the country's foreign currency holdings fell by $4.3 billion to $580.3 billion as of March 5, while edging out Russia’s $580.1 billion pile. Currently, in the International Monetary Fund table, China has the largest reserves, followed by Japan and Switzerland.
India now has enough reserves to cover roughly 18 months of imports. Experts say that this is due to the rare current-account surplus, rising foreign direct investment and inflows into the local stock market.
"India’s various reserves adequacy metrics have improved significantly, particularly in the last few years. The healthy FX reserves position should give enough comfort to the RBI for dealing with any potential external shock-driven capital-stop or outflows in the period ahead," Bloomberg quoted Deutsche Bank chief India economist Kaushik Das as saying.
In 2020, the RBI bought a net $88 billion in the spot forex market. This made the Indian rupee the worst performer among Asia’s major currencies.
Following this, RBI Governor Shaktikanta Das in the latest interaction had stressed the idea of emerging market central banks to build reserves to prevent any external shocks. The RBI even focused on further strengthening foreign exchange reserves.
EPFO keeps interest rate untouched at 8.5% for 2020-21
NEW DELHI, March 5: The Employees' Provident Fund Organisation (EPFO) announced the interest rates on Provident Fund deposits for the financial year 2020-21 on March 4. The EPFO board has recommended 8.5 percent interest for the financial year 2020-21, same as 2019-20.
Speculations about lower interest on provident fund deposits due to the economic downfall and coronavirus pandemic were making the rounds. However, the rate has been kept unchanged.
The decision was taken at the 228th meeting of the Central Board of Trustees, held in Srinagar under the chairmanship of Santosh Kumar Gangwar, Union Minister of State for Labour and Employment.
"The Central Board recommended 8.50% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2020-21. The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers’ accounts," the board said in a statement.
Last year, in March, EPFO had reduced the interest rate on provident fund deposits to a seven-year low of 8.5 percent for 2019-20.
For the financial year 2018-19, the interest rate was fixed at 8.65 percent. The EPFO had provided an 8.55 percent interest rate to its subscribers for 2017-18 and an interest rate was 8.65 percent for the financial year 2016-17.
In Budget 2021, Finance Minister Nirmala Sitharaman had announced that the depositors investing more than Rs 2.5 lakh in EPF in a year would have the interest liable for tax from April 1.
"In order to rationalise tax exemption for the income earned by high-income employees, it is proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of Rs 2.5 lakh. This restriction shall be applicable only for the contribution made on or after 01.04.2021," Sitharaman said in the budget speech.
According to K E Raghunathan, CBT Member representing employers, the organisation had an income of Rs 70,500 crore for distribution. He further noted the EPFO will be left with a surplus of Rs 300 crore after crediting an interest rate of 8.5 percent for FY21.
Govt committed to support domestic travel & hospitality sector with multiple infrastructure projects: Nitin Gadkari
NEW DELHI, March 1: Nitin Gadkari, Union Minister for MSME and Roads, Transport & Highways, Govt of India today said that with the goal of Atmanirbhar Bharat, the government is committed to create multiple opportunities for MSMEs, boost tourism with the help of upcoming infrastructure projects.
Addressing the webinar on ‘MSME Travel and Hospitality Industry’, organized by FICCI and supported by OYO Hotels and IATO, Gadkari said, “The infrastructural projects in the pipeline as part of the central Government’s plans have laid the foundation of Atmanirbhar Bharat and will also boost domestic tourism in the country. Innovation is key to the revival of the travel and hospitality sector. Industry players such as FICCI, OYO Hotels & Homes and IATO should take advantage of the government schemes to come together and support MSMEs.”
Gadkari further added, “The government's initiatives, such as collateral-free automatic loans for business, including MSMEs; INR 50,000 crore equity infusion through MSME Fund of Funds, which benefits companies with higher credit ratings, will generate tremendous business opportunities. It will turn into a win-win situation for the industry. The domestic tourist destinations, including hills, forests, and religious pilgrimage, will benefit from upcoming projects such as Char Dham Road, New Delhi-Dehradun Expressway, 22 Green Express Highways, and others. There's a huge potential for small hotel partners, agents to tap into this and look at expanding their offerings catering to the needs of tourists."
Ritesh Agarwal, Member FICCI Executive, Committee & Founder & Group, OYO Hotels & Homes said, "I would thank Shri Nitin Gadkari ji, Union Minister for MSME and Roads, Transport & Highways for his valuable time. Along with our 200+ small hotel partners, travel agents, we had an insightful experience listening to the government's vision to support MSMEs and their efforts to revive the hospitality sector in the country. OYO Hotels & Homes have continuously been supporting the local communities and small businesses with various initiatives such as home-stays in Kevadia, generating economic opportunities to boost domestic tourism in the country."
Dilip Chenoy, Secretary-General, FICCI said, "Throughout the pandemic, we at FICCI have worked with multiple industry partners to benefit the MSMEs. The government has supported the industry and created a clear roadmap for the revival of the economy."
Pronab Sarkar, President, Indian Association of Tour Operators (IATO) & Founder Member, Swagatam Tours Pvt. Ltd said, "With domestic tourism uptake being affected during the pandemic, we have been continuously supporting the government in its measures to revive the economy. However, with the sector being worst affected, we are still hopeful for some financial support/stimulus package, policy changes so that our tour operators and travel agents can benefit from the required working capital to sustain these challenging times."
The webinar saw active participation of 200+ OYO hotel partners and travel and tour agents. The discussion focused on the future of hospitality and tourism, including strategies and steps taken by the government to support MSME players, boosting the country's infrastructure and thereby focusing on promoting domestic tourism, which is an integral contributor in building India's robust revival story.
Sensex surges 750 points to end trading at 49,850; Nifty closes above 14,750
NEW DELHI, March 1: The benchmark BSE Sensex surged nearly 750 points and NSE Nifty rallied over 232 points on Monday as investors cheered the domestic economy returning to positive territory after two quarters of contraction.
The 30-share BSE index briefly traded above the 50,000-mark during the mid-session, before ending at 49,849.84, showing a rise of 749.85 points or 1.53 per cent.
Likewise, the NSE barometer Nifty settled with a gain of 232.40 points or 1.60 per cent at 14,761.55.
Of the Sensex constituents, 29 closed with gains.
Top performers were PowerGrid, ONGC, Ultratech Cement, Asian Paint, Kotak Bank and Titan – rising as much as 5.94 per cent.
After two consecutive quarters of contraction, the Indian economy has finally entered an expansionary path.
The Gross Domestic Product (GDP) grew 0.4 per cent in the October-December 2020 period compared with the same period a year back, data released by the National Statistics Office on Friday showed.
Analysts said, the high-frequency indicators were pointing towards the fact that the domestic economy is slowly entering the recovery path.
On Friday,the BSE Sensex had crashed 1,939.32 points or 3.80 per cent – its worst one-day fall since May 4 last year. Similarly, the broader NSE Nifty had plunged 568.20 points or 3.76 per cent – its biggest single-day drop since March 23 last year.
Foreign investors had sold equities worth ₹8,295.17 crore on a net basis on Friday, as per exchange data.
Elsewhere in Asia, bourses closed significantly higher amid some stability in bond markets after last week’s turmoil. Further, progress in the US stimulus package also lent some support to investor sentiments globally.
Meanwhile, the global oil benchmark Brent crude was trading 0.88 per cent lower at USD 65.39 per barrel.
On the forex market front, the rupee dropped 8 paise to end at 73.55 against the US dollar.