Arun Kejriwal: Global markets strained over N deal

A Kim Jong Un impersonator poses holding a durian fruit in front of the Esplanade theatre in Singapore yesterday US President Donald Trump on May 24 cancelled a planned June 12 meeting with North Korean leader Kim Jong Un in Singapore citing ldquoopen hostilityrdquo from Pyongyang But within 24 hours he reversed course saying it could still go ahead after productive talks were held with North Korean officials PicAFPMarkets were volatile last week with four of the five trading sessions witnessing moves of 250 points or thereabout on the BSESENSEX On a weekly basis however the net change was 7657 points or 022 to close at 3492487 points NIFTY gained 875 points or 008 to close at 1060515 points The broader markets saw the BSE100 BSE200 and BSE500 gain 025 020 and 011 respectively BSEMIDCAP was up 005 while BSESMALLCAP was down 102The top sectoral gainer was BSEIT up 255 followed by BSETECK 249 and BSEBANKEX 202 The top loser was BSEOILampGAS down 260 followed by BSEREALTY 244 and BSECONDUR207 In individual stocks the top gainer was SBI up 1041 followed by Bank of Baroda 1038 and Hindalco 545 The top loser was Vedanta down 742 Hind Petro 576 Tata Steel 428 and ITC 375Dow Jones was up a mere 38 points or 015 to close at 2471509 points The Indian Rupee recovered ground after being under pressure for quite some weeks The low of the rupee was R6869 It closed at R6778 a gain of R21 paisa or 031Mixed notionsGlobal cues are mixed on the back of uncertainty of geopolitical issues like oil Iran China and North Korea What will happen with the US calling off the summit with North Korea no clarity on trade wars with China and the nuclear issue with Iran is causing a strain on global markets The week ahead sees May futures expiring on Thursday the 31st of May The current value of NIFTY at 1060515 points is lower by 1265 points compared to the start of the series The high of the series was at 1092920 points made on 15th of May when Karnataka results were declared and the low was 1041780 points made on 23rd of May just last week Currently the series is tied between the bulls and the bears and could go either wayPressure on boardsSEBI has written to ICICI Bank on the issue of disclosures in the case of CEOampMD and the loans of Videocon and Nupower While this notice was in the offing for a long time it has finally happened and would put pressure on the bank board and the CEOampMD The second company in the news is Fortis Healthcare where the shareholders have voted out the last director after the other three stepped down prior to the EGM The new board would have to relook at the binding bids before it and take a fresh call on the sale of Fortis group of hospitals On yet another front the resolution plan of Binani Cement seems to be never ending and has become a court issue When the sale would see the light of day is indeed a milliondollar questionReference materialThe importance of these three issues is the fact that they would become a test case and reference material for the future when the role of the board is discussed and the role of the CEO nominated directors and independent directors comes up Primary market is quiet as far as the equity side is concerned but has become very active on the debt front The size of issues and the coupon rates indicate that the issuers of debt expect interest rates to go up in the immediate future RBI raising rates in the next meeting could be a reality and there could be more than just one rate hike in the current financial year Rising rates could also act as a dampener on corporate earnings as higher interest rates has a cascading effect on costsWith expiry of May futures in four days time markets would be volatile and choppy The change in mutual funds holding of midcaps and small caps as designated by SEBI with 30th June 2018 being the deadline would keep this segment of the market under extreme pressure Use any sharp dips to enter the market otherwise remain cautiousArun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt LtdDisclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes onlyCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updates