Last week the name Mossack Fonseca rattled the world, whether it were markets, celebrities or politicians. The massive leak of documents which is the biggest ever saw the veil over the largest known legal firm excelling in creating offshore firms in tax haven Panama blown. The world is still grappling with the after effects of the same and it could be compared with a severe earthquake where even after the main one, after shock of tremors continues.
RBI governor in the monetary policy review cut Repo rates by 25 basis points on expected lines to 6.5%. He also reduced the policy rate corridor from +/- 100 basis points to +/-50 basis points and as a consequence of the same MSF (marginal standing facility) rate was adjusted to 7%. This will infuse liquidity into the system. Markets corrected as they were expected to do so after a very strong March in which benchmark indices gained over 10%.
The week saw the BSESENSEX lose 595.70 points or 2.36% to close at 24,673.84 points while NIFTY lost 157.85 points or 2.05% to close at 7,555.20 points. The reporting season has begun and IT heavyweight Infosys would be declaring results on Friday the 15th April which incidentally is a holiday. Speaking of holidays the week ahead has a mere three trading days with Thursday and Friday both being holidays. Global markets would be open on these days and we should therefore expect volatility on Wednesday which becomes the last trading day before the long weekend.
The primary market saw one new listing and one issue open and close for subscription. The IPO from India’s only e-commerce player to be listed, Infibeam Incorporation which had raised Rs 450 crs in a price band of Rs 360-432 got its shares listed on Monday the 4th April. The share managed to stay afloat and closed at Rs 443.20 a gain of 2.39%. The IPO from microfinance company Equitas Holdings Limited which raised Rs 720 crs through a fresh issue and Rs 1,555 crs through a secondary offering in a price band of Rs 109-110 was overwhelmingly subscribed. The overall subscription was 17.21 times and the company garnered subscription of 14.93 times in the QIB section, 57.29 times in the HNI segment and 1.40 times in the retail segment. The retail segment received approximately 5.82 lac forms which means on the basis of one lot which is the method of allocating shares, the issue is subscribed 1.1 times.
The week ahead would be choppy and driven by global markets as we have results beginning later in the week and this is a very short trading week. Mossack Fonseca may continue to affect named companies. Trade cautiously.
