Market to remain bullish in 2023 as equities expected to scale new highs
Indian stock markets are expected to scale new peaks in 2023, with the Nifty expected to cross 19,000 points, according to survey by the Economic Times of 33 money managers and analysts at various brokerages. While 42 per cent said they expect the 50-share Nifty to trade between 19,000 and 20,000 next year, 33 per cent said it will cross 20,000. That would mean an increase of between 4.8 and 10.3 per cent. For the Sensex, 55 per cent said they expect a trading range of 65,000-70,000 points in 2023.
Why it’s important: Despite the optimism, the markets could be a rollercoaster rise for investors due to a looming global downturn and high stock valuations. The recent outperformance could also mean they could be underperformers among peers.
Balance sheets of Indian banks expand in double digits after seven years
The health of India’s commercial banks continued to improve in 2021-22, with their balance sheets growing at double digits after a gap of seven years and their asset quality and capital position improving, the Reserve Bank of India said in its annual report on trend and progress of banking in India. The central bank, however, flagged the issue of slippages from restructured accounts. Banks must ensure due diligence and robust credit appraisal to limit credit risk, it said.
Why it’s important: Profitability is growing in banks as they leave the stress of bad loans behind. Asset quality has improved significantly but they cannot afford to ease up on due diligence.
Reforms have set the stage for steady GDP annual growth of 6.5-7 percent
Economic reforms like the implementation of GST and the bankruptcy code have positively impacted India’s economy, setting the stage for sustained 6.5-7% growth in the coming years, the finance ministry’s chief economic adviser V. Anantha Nageswaran said in an interview. They have been overshadowed somewhat by the pandemic, balance sheet repair for banks and companies, and external shocks such as commodity price increases and interest rate hikes, which now seem to be easing.
Why it’s important: India’s economic growth remains the bright spot among a looming global downturn. Policymakers are hoping this would sustain in the longer term as well.
Covid resurgence see demand for masks, sanitizers rise 100 per cent
Covid essentials such as masks, sanitizers, immunity boosters and health supplements are back in demand, as worries intensify over spread of a new virus variant in many Asian countries. In some categories such as masks, demand has surged by up to 100 per cent after being flat for months, according to retailers, companies, and pharmacy channels.
Why it’s important: Prime Minister Narendra Modi has urged citizens to be vigilant against Covid amid a resurgence in China. People need to wear face masks and frequently wash their hands.
Daily vaccination double in country amid renewed global covid scare
The surge in global Covid cases, led by an Omicron sub-lineage BF.7, has boosted India’s vaccination uptick in the past few days. While infections in the country have not risen and are averaging at 150-200 cases a day, the fear of Covid infections has led to a doubling of daily vaccination rates. In the first 20 days of December, the average daily vaccination in the country was 42,591 doses. Ever since the central government issued an advisory, it has almost doubled to 82,113. On December 23-24, total daily vaccinations were over 100,000.
Why it’s important: Although covid cases are not rising in India, fear of infections have led to higher demand for booster doses. Vaccine makers say there are sufficient stocks to meet the rising demand.
Budget to issue rules for TDS disclosures for online gaming firms
The revenue department is preparing detailed guidelines on the taxability of the online gaming sector to ensure the game host deducts tax on the entire winning amount, even if it offers the sum in the form of coupons, tokens, or as other non-cash payments. Online gaming firms may be required to furnish detailed disclosures, including prize pool, dates on which winnings were paid or credited to players, and mode of the prize under the provision for tax deducted at source.
Why it’s important: The proliferation and wide use of online gaming in India has turned the spotlight on the taxability of related financial transactions. Online gaming needs tighter regulations to ensure transparency.
Over 25,000 Flipkart employees in line for financial windfall
More than 25,000 current and former employees of Flipkart are set to make a financial windfall as the e-commerce giant intends to award a whopping $ 700 million one-time cash payout to holders of employee stock options. Out of the total number eligible for the payout, 14,000, or 70 per cent of Flipkart’s 20,000-strong workforce, are still on the company’s payroll. Former employees holding PhonePe shares will also be eligible for the payout.
Why it’s important: The payout to holders of employee stock option has been triggered by the transfer of Flipkart’s ownership in digital payments unit PhonePe last week to US parent Walmart.
Tata Group consolidates all online ventures under Tata Digital umbrella
The Tata Group is transferring the holding of Tata Unistore, which owns and runs the fashion and luxury-focused ecommerce platform Tata Cliq, to Tata Digital. Tata Digital becomes the sole entity for all online shopping ventures of the Tatas, including Tata Neu, Big Basket and Croma, as per regulatory filings.
Why it’s important: The move to consolidate all online venture under Tata Digital makes its plan that the conglomerate is further intensifying its presence in ecommerce.
Tech spending of banks expected to remain flat in 2023, moderating overall growth
The global banking and financial services sector will likely drag down overall growth in tech spending next year due to inflation, a slowdown in the US and Europe, and increased insourcing by financial institutions. Tech spending overall would increase 11 per cent next year, an expert said, but actual growth will be negligible on account of inflationary pressures. Banking, financial services and insurance clients account for nearly 30 per cent of Indian IT’s $ 227 billion revenue.
Why it’s important: The muted growth in Indian IT sectors largest revenue earner could dent profitability of the sector in 2023, forcing them to increase efficiency to protect margins.
Top corporate brass earning 240 times median staff pay
CEOs and other corporate top executives have widened the gap in pay between themselves and their employees. The average top executive now earns 241.2 times the median employee compensation, reveals an analysis of data from tracker Prime Infobase. This figure for 2021-22 was higher than the pre-pandemic year of 2018-19, when the ratio was 21.8. The average top executive compensation has now touched Rs 12.7 crore, or a monthly compensation of Rs 1 crore. The median employee salary is now Rs 8.2 lakh for the companies in the sample.
Why it’s important: Company brass has been fattening their wallets as corporate earnings have surged despite the pandemic. The pay disparity is set to widen in the coming years.
