ETMarkets Morning Podcast: All eyes on SC verdict on loan moratorium

>> All eyes on the Supreme Court verdict on loan moratorium
>> Sebi finds a way to resolve regulatory friction over AT1 bonds
>> NSE told to fix responsibility for February tech glitch
AND
>> HNIs, retail investors dare to live with volatility on Dalal Street

Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.

Let’s start with a quick glance on the state of the markets.

Dalal Street looked headed for a positive start this morning. Some easing in the 10-year US Treasury yield from its highest level in 14 months helped equity investors breathe easy. Stocks traded steady in most other Asian markets as did US stocks futures. The US dollar hovered below recent highs. The Turkish lira showed some signs of stability following a 7.5% dive on Monday. Crude oil prices fell on concerns that new pandemic curbs and slow vaccine rollout in Europe will slow a recovery in fuel demand.

That said, here’s what else is making news.

The Supreme Court will today pronounce the much-awaited verdict on a batch of pleas by various trade associations seeking an extension of the loan moratorium and other reliefs in view of the Covid-19 pandemic. A bench headed by Justice Ashok Bhushan had earlier reserved its verdict in the case on December 17 last year. The Centre had submitted that if it were to consider waiving interest on all the loans and advances to all categories of borrowers for the six-month moratorium period announced by RBI, then the amount foregone would be more than Rs 6 lakh crore. If banks were to bear the burden, it would wipe out a substantial part of their net worth, rendering most of the lenders unviable and raising a serious question over their survival.

Do watch bank stocks closely.

High net worth individuals and retail investors are daring to live through market volatility on Dalal Street. Even as rising bond yields in the US and surging Covid-19 cases have made the stock market outlook uncertain, that has not discouraged rich individuals and retail investors from betting big. The outstanding positions in stock futures of these investors are nearly back to pre-Covid-levels, suggesting that they have not been deterred by the recent bouts of volatility in equities.

That’s an interesting trend to catch. We will wait and watch how things pan out over there.

Sebi has found a way to resolve issues that had cropped up between itself and the Finance Ministry on the issue of valuation of AT1 bonds. On Monday, the market regulator provided a softer glide path for these bonds to avoid any regulatory friction. Sebi now says that till March 31, 2022, these bonds will be valued at 10-year residual maturity, between April and September 2022 at 20 years, between October 2022 and March 2023 at 30 years and thereafter (in effect, from fiscal 2023-24) at 100-year residual maturity.

That’s what they call… to Kill the snake, but break not the stick

Sebi has asked the board of NSE to determine why the exchange’s management failed to shift to the disaster recovery site within the specified timeframe on February 24, when trading was halted for nearly four hours due to a technical glitch. The regulator has asked the exchange’s board to fix ‘individual responsibilities’ for the fiasco within 21 days. On Monday, NSE said that a combination of completely unexpected events led to the four-hour traded halt on February 24. Its root cause analysis showed one of the critical failures was by a vendor that had a proprietary system embedded into its hardware but was not disclosed to the exchange.

LASTLY…

Tata Group and SpiceJet promoter Ajay Singh have been shortlisted for the bid to buy out Air India, TOI reported quoting people familiar with the development. The two will now have to submit their financial bids after completing due diligence on the national carrier’s books, agreements and liabilities. In their financial bids, the parties have to state the quantum of AI’s debt they will be willing to take up and the upfront payment they will make for the asset. Whoever quotes the highest economic value for AI will be the winner of the bid.

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

Maruti Suzuki has announced a price increase across its range of vehicles from next month to offset the impact of rising input costs.

The Delhi high court on Monday stayed a single judge’s order restraining Future Retail from going ahead with its multi-crore deal with Reliance Retail to sell its business.

SBI has invoked personal guarantees of KSK Energy’s promoters that they had provided for a Rs 5,000 crore loan they had obtained for KSK Mahanadi Power.

Adani Ports and SEZ on Monday finalised the purchase of an additional 58.1% or the entire promoter’s stake in Gangavaram Port, said a person close to the know

Bharti Airtel has allotted some 36.47 million preferential shares to a Warburg Pincus affiliate — which will end up with 0.664% in Airtel— at Rs 600 apiece, apart from Rs 1,038 crore in cash to buy out Warburg’s 20% in Bharti Telemedia

Piramal Capital & Housing Finance has raised Rs 4,050 crore in two tranches through an issue of non-convertible debentures as it prepares to acquire DHFL’s business through a reverse merger

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 put with us for all the market news through the day. Happy investing!