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Wall Street traders suddenly converge on the economic hazards ahead

by | Sep 8, 2024 | Share Market


3 min read Last Updated : Sep 08 2024 | 5:05 PM IST


For those on Wall Street clinging to the bull case on the economy, life is getting harder.


Troubling data — long foretold in the bond and commodity markets — woke traders across risky assets up from their slumber this week, in the worst performance for stocks since the 2023 regional bank crisis.


After rebounding from the early-August swoon, traders succumbed to growth fears due to a steady drumbeat of dispiriting economic news, particularly from the labour market. The S&P 500 fell for four straight days, credit spreads widened at the fastest clip since early August, and an index of computer chip makers plunged 12 per cent —the most since the pandemic meltdown.

 


With the stock benchmark up 13 per cent this year, the gyrations are a mere blip in bulled-up charts, and risk-sensitive assets are still largely pricing in a soft landing ahead. Yet the trading action — especially on Friday — was a rare instance of accord among cross-asset investors, who have never been more divided about the economy’s future since 2019, according to one measure.


As more than two years of hawkish Federal Reserve (Fed) policy take their toll, equities last week — dragged down by economically sensitive companies — joined longer-lasting market tumbles, afflicting oil, copper, and bond yields for more than a month.


“Investors may be waking up to the recession risk right now, but only after hitting the snooze button 10 times,” said Michael O’Rourke, chief market strategist at JonesTrading. “The environment has only deteriorated when you consider both the economic data and subsequent earnings reports.”


Bond investors — historically dubbed the smart money for their propensity to foresee economic shifts — priced in faster interest-rate cuts. This pushed two-year Treasury yields to the lowest level since 2022. The commodity complex similarly sent warning signs on the outlook for the consumption and investment cycle, with oil erasing all of its 2024 gains and copper falling in 13 of the last 16 weeks.


While markets have charted different courses in 2024, last week’s move has an obvious precursor: early August’s labour market weakness. The latest flare-up reflects concerns that the economy may be grinding to a halt too quickly for the Fed to rescue it without urgent policy redress.


JPMorgan Chase & Co.’s model, which compares asset movements to past cycles, showed that as of Wednesday, recession odds were relatively low in equities and investment-grade credit (9 per cent) but higher in commodities and government bonds (62 per cent and 70 per cent, respectively).


“I think no market is really pricing in a reasonable chance of a recession, but the totality of data suggests that risks of a recession are growing,” said Priya Misra, portfolio manager at JPMorgan Asset Management.


The divergence between stocks and bonds is noticeable, with the S&P 500 ending August at an all-time high and two-year Treasuries reflecting the conviction that Jerome Powell & Co. will be forced to enact a faster-than-expected pace of rate cuts. The yield curve is normalising, raising fresh questions about its reliability as a harbinger of recession.

First Published: Sep 08 2024 | 5:05 PM IST



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Hindenburg research: Sebi has lot to explain, says Cong over Mauritius FPIs

by | Sep 8, 2024 | Share Market


SEBI

Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless. (Photo: Shutterstock)

3 min read Last Updated : Sep 08 2024 | 1:25 PM IST


The Congress on Sunday said the Sebi investigation into “the Adani Group’s brazen attempt” to bypass regulations is still languishing and the capital markets regulator has a lot to explain.


Congress general secretary in-charge communications Jairam Ramesh’s remarks attacking Sebi came after a media report which claimed that two Mauritius-based foreign portfolio investors (FPIs), who were mentioned in the January 2023 report on the Adani Group by short-seller Hindenburg Research, have petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms.


“Two Mauritius-based foreign portfolio investors (FPIs), a part of the revelations in the still-unfolding Modani mega scam, have now petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms before the upcoming September 9th deadline,” Ramesh said.

 


Both the FPIs are alleged to be violating rules that require investors to not be over-invested in a single stock, he said.


These rules are meant to ensure that black money routed through tax havens does not flood back into Indian capital markets, Ramesh said, adding they must be upheld at all costs.


“These are the very same FPIs who stand accused of participating in the Adani Group’s brazen attempt to bypass Sebi’s regulations and amass benami stakes in its own companies. These are the very firms that benefitted from Sebi’s removal of the requirement to identify the ‘ultimate beneficial owner’ of offshore funds, a decision that it was forced under public pressure to reverse in June 2023 in a tacit admission of its guilt,” the Congress leader said in his post on X.


“The basic fact is that a Sebi investigation into these violations that was supposed to be completed in two months and shared with the Supreme Court is still languishing 18 months later,” Ramesh said.


Sebi has a lot to explain, quite apart from the multiple conflicts of interest of its Chairperson that are now unravelling, he said.


Ramesh’s remarks come weeks after Hindenburg Research launched a fresh broadside against market regulator Sebi chairperson Madhabi Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.


Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless and asserted that their finances are an open book.


Adani Group had also termed Hindenburg Research’s allegations as malicious and manipulative of select public information, saying it has no commercial relationship with the Sebi chairperson or her husband.


The Congress has been alleging financial regularities against the Adani Group and favours being given by the government to the conglomerate to augment its profits.


The opposition party has been persistent on its attack on the government, since Adani Group stocks took a beating on the bourses in the wake of the Hindenburg Research making a litany of allegations, including fraudulent transactions and share-price manipulation on the conglomerate headed by industrialist Gautam Adani.


The Adani Group had dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

First Published: Sep 08 2024 | 1:25 PM IST



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Hindenburg research: Sebi has lot to explain, says Cong over Mauritius FPIs

by | Sep 8, 2024 | Share Market


SEBI

Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless. (Photo: Shutterstock)

3 min read Last Updated : Sep 08 2024 | 1:25 PM IST


The Congress on Sunday said the Sebi investigation into “the Adani Group’s brazen attempt” to bypass regulations is still languishing and the capital markets regulator has a lot to explain.


Congress general secretary in-charge communications Jairam Ramesh’s remarks attacking Sebi came after a media report which claimed that two Mauritius-based foreign portfolio investors (FPIs), who were mentioned in the January 2023 report on the Adani Group by short-seller Hindenburg Research, have petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms.


“Two Mauritius-based foreign portfolio investors (FPIs), a part of the revelations in the still-unfolding Modani mega scam, have now petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms before the upcoming September 9th deadline,” Ramesh said.

 


Both the FPIs are alleged to be violating rules that require investors to not be over-invested in a single stock, he said.


These rules are meant to ensure that black money routed through tax havens does not flood back into Indian capital markets, Ramesh said, adding they must be upheld at all costs.


“These are the very same FPIs who stand accused of participating in the Adani Group’s brazen attempt to bypass Sebi’s regulations and amass benami stakes in its own companies. These are the very firms that benefitted from Sebi’s removal of the requirement to identify the ‘ultimate beneficial owner’ of offshore funds, a decision that it was forced under public pressure to reverse in June 2023 in a tacit admission of its guilt,” the Congress leader said in his post on X.


“The basic fact is that a Sebi investigation into these violations that was supposed to be completed in two months and shared with the Supreme Court is still languishing 18 months later,” Ramesh said.


Sebi has a lot to explain, quite apart from the multiple conflicts of interest of its Chairperson that are now unravelling, he said.


Ramesh’s remarks come weeks after Hindenburg Research launched a fresh broadside against market regulator Sebi chairperson Madhabi Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.


Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless and asserted that their finances are an open book.


Adani Group had also termed Hindenburg Research’s allegations as malicious and manipulative of select public information, saying it has no commercial relationship with the Sebi chairperson or her husband.


The Congress has been alleging financial regularities against the Adani Group and favours being given by the government to the conglomerate to augment its profits.


The opposition party has been persistent on its attack on the government, since Adani Group stocks took a beating on the bourses in the wake of the Hindenburg Research making a litany of allegations, including fraudulent transactions and share-price manipulation on the conglomerate headed by industrialist Gautam Adani.


The Adani Group had dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

First Published: Sep 08 2024 | 1:25 PM IST



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Hindenburg research: Sebi has lot to explain, says Cong over Mauritius FPIs

by | Sep 8, 2024 | Share Market


SEBI

Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless. (Photo: Shutterstock)

3 min read Last Updated : Sep 08 2024 | 1:25 PM IST


The Congress on Sunday said the Sebi investigation into “the Adani Group’s brazen attempt” to bypass regulations is still languishing and the capital markets regulator has a lot to explain.


Congress general secretary in-charge communications Jairam Ramesh’s remarks attacking Sebi came after a media report which claimed that two Mauritius-based foreign portfolio investors (FPIs), who were mentioned in the January 2023 report on the Adani Group by short-seller Hindenburg Research, have petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms.


“Two Mauritius-based foreign portfolio investors (FPIs), a part of the revelations in the still-unfolding Modani mega scam, have now petitioned the Securities Appellate Tribunal, seeking urgent relief from complying with Sebi’s new foreign investor norms before the upcoming September 9th deadline,” Ramesh said.

 


Both the FPIs are alleged to be violating rules that require investors to not be over-invested in a single stock, he said.


These rules are meant to ensure that black money routed through tax havens does not flood back into Indian capital markets, Ramesh said, adding they must be upheld at all costs.


“These are the very same FPIs who stand accused of participating in the Adani Group’s brazen attempt to bypass Sebi’s regulations and amass benami stakes in its own companies. These are the very firms that benefitted from Sebi’s removal of the requirement to identify the ‘ultimate beneficial owner’ of offshore funds, a decision that it was forced under public pressure to reverse in June 2023 in a tacit admission of its guilt,” the Congress leader said in his post on X.


“The basic fact is that a Sebi investigation into these violations that was supposed to be completed in two months and shared with the Supreme Court is still languishing 18 months later,” Ramesh said.


Sebi has a lot to explain, quite apart from the multiple conflicts of interest of its Chairperson that are now unravelling, he said.


Ramesh’s remarks come weeks after Hindenburg Research launched a fresh broadside against market regulator Sebi chairperson Madhabi Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.


Sebi Chairman Buch and her husband have denied the allegations levelled against them as baseless and asserted that their finances are an open book.


Adani Group had also termed Hindenburg Research’s allegations as malicious and manipulative of select public information, saying it has no commercial relationship with the Sebi chairperson or her husband.


The Congress has been alleging financial regularities against the Adani Group and favours being given by the government to the conglomerate to augment its profits.


The opposition party has been persistent on its attack on the government, since Adani Group stocks took a beating on the bourses in the wake of the Hindenburg Research making a litany of allegations, including fraudulent transactions and share-price manipulation on the conglomerate headed by industrialist Gautam Adani.


The Adani Group had dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

First Published: Sep 08 2024 | 1:25 PM IST



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IPO buzz next week as 13 companies hit primary mkt to raise Rs 8,644 cr

by | Sep 8, 2024 | Share Market


IPO

The four main-board IPOs include that of Bajaj Housing Finance, which is expected to mobilise around Rs 6,560 crore, P N Gadgil Jewellers ( Rs 1,100 crore), Kross Ltd ( Rs 500 crore), and Tolins Tyres (Rs 230 crore) (Photo: Shutterstock)

4 min read Last Updated : Sep 08 2024 | 11:50 AM IST


The IPO market will be bustling next week, with four companies, including Bajaj Housing Finance, set to launch their initial share-sale to raise a total of Rs 8,390 crore.


Besides these four main-board IPOs, nine SMEs are preparing to debut with their maiden public issues next week, targeting to collect Rs 254 crore. Together, these 13 firms are looking to raise Rs 8,644 crore through IPO.


Munish Aggarwal, Managing Director Head – Equity Capital Markets, Equirus, expects the next two weeks to be hectic in terms of issuance activity in IPO markets.

 


“While this seems to indicate that the markets are overheating, we believe that this is more symptomatic of the attempt by most issuers who have valid Sebi observations and decent traction with investors to try and utilize their financials for Fiscal 2024 to launch IPOs,” he said.


According to Sebi, financial data in the Red Herring Prospectus (RHP) must be less than six months old at the time of the IPO. Therefore, September is the last month when companies can use their FY24 financials to launch IPOs, he added.


The four main-board IPOs include that of Bajaj Housing Finance, which is expected to mobilise around Rs 6,560 crore, P N Gadgil Jewellers ( Rs 1,100 crore), Kross Ltd ( Rs 500 crore), and Tolins Tyres (Rs 230 crore).


Of these, the initial share-sales of Bajaj Housing Finance, Kross Ltd, and Tolins Tyres will open for subscription on September 9 and conclude on September 11, while that of P N Gadgil Jewellers will open on September 10 and close on September 12.


Additionally, Arkade Developers is expected to float IPO on September 16 and Western Carriers India may also soon come out with its public issue.


So far this year, more than 50 main-board IPOs have been launched, along with one Follow-on Public Offering (FPO) by Vodafone Idea.


The public issue of Shree Tirupati Balajee Agro Trading Company is underway and IPOs of Baazar Style Retail and Gala Precision Engineering closed earlier this month.


Before that, IPOs of 10 firms, including Ola Electric Mobility and Brainbees Solutions Ltd, the parent firm of online e-commerce platform FirstCry, were concluded in August.


“We believe that the amount raised through main-board IPOs which was Rs 80,000 crore till end of August, will expand to over Rs 1.25 lakh crore by the end of this calendar year,” Equirus’ Aggarwal said.

Sunil Damania, Chief Investment Officer, MojoPMS, said: “As long as the secondary market remains strong, we can expect continued growth in the primary market for IPOs. However, if some IPOs start listing below their offer price, it could reduce this momentum and slow down IPO activity.”

The companies are tapping the primary market to raise funds for expansion plans, retire debt, support working capital requirements and provide exit route to the existing shareholders.


Apart from the main-board, SMEs launching their IPOs next week are — Aditya Ultra Steel, Shubhshree Biofuels Energy, Share Samadhan, Gajanand International, SPP Polymers, Trafiksol ITS Technologies, Excellent Wires and Packaging, Innomet Advanced Materials, and Envirotech Systems.


These companies are aspiring to mobilize between Rs 12-45 crore each through public issue.


The IPOs for Aditya Ultra Steel, Shubhshree Biofuels Energy, Share Samadhan, and Gajanand International will begin on September 9; SPP Polymers and Trafiksol ITS Technologies on September 10; Excellent Wires and Packaging and Innomet Advanced Materials on September 11; and Envirotech Systems on September 13.


Recently, IPOs have garnered significant subscription levels. In August, main-board IPOs were subscribed on an average over 75 times, while the year-to-date average for 2024 is 66 times. For SME IPOs, the average subscription in August was 290 times, with a year-to-date average of more than 259 times, data showed.


Vaibhav Porwal, Co-founder, Dezerv, said the recent surge in SME stocks and strong listings gains in some of the companies are largely driven by three key factors — liquidity, FOMO effect and robust retail participation.

“The fear of missing out (FOMO) on quick gains has spurred continued investment in SME IPOs.”

“While this trend might persist in the short term, risks like market corrections and regulatory interventions could temper the frenzy in the market. Investors should exercise caution and focus on fundamentals, as the SME stocks could correct sharply if sentiment shifts,” he added.


V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said IPOs of SMEs without any track record and sound financials are getting oversubscribed many times, driven by retail investors chasing listing gains. These are excesses that need to be checked.


Recently, the regulator has aired concerns around activity in SME IPOs and experts expect some slowdown in activity in that market.

First Published: Sep 08 2024 | 11:43 AM IST



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IPO buzz next week as 13 companies hit primary mkt to raise Rs 8,644 cr

by | Sep 8, 2024 | Share Market


IPO

The four main-board IPOs include that of Bajaj Housing Finance, which is expected to mobilise around Rs 6,560 crore, P N Gadgil Jewellers ( Rs 1,100 crore), Kross Ltd ( Rs 500 crore), and Tolins Tyres (Rs 230 crore) (Photo: Shutterstock)

4 min read Last Updated : Sep 08 2024 | 11:50 AM IST


The IPO market will be bustling next week, with four companies, including Bajaj Housing Finance, set to launch their initial share-sale to raise a total of Rs 8,390 crore.


Besides these four main-board IPOs, nine SMEs are preparing to debut with their maiden public issues next week, targeting to collect Rs 254 crore. Together, these 13 firms are looking to raise Rs 8,644 crore through IPO.


Munish Aggarwal, Managing Director Head – Equity Capital Markets, Equirus, expects the next two weeks to be hectic in terms of issuance activity in IPO markets.

 


“While this seems to indicate that the markets are overheating, we believe that this is more symptomatic of the attempt by most issuers who have valid Sebi observations and decent traction with investors to try and utilize their financials for Fiscal 2024 to launch IPOs,” he said.


According to Sebi, financial data in the Red Herring Prospectus (RHP) must be less than six months old at the time of the IPO. Therefore, September is the last month when companies can use their FY24 financials to launch IPOs, he added.


The four main-board IPOs include that of Bajaj Housing Finance, which is expected to mobilise around Rs 6,560 crore, P N Gadgil Jewellers ( Rs 1,100 crore), Kross Ltd ( Rs 500 crore), and Tolins Tyres (Rs 230 crore).


Of these, the initial share-sales of Bajaj Housing Finance, Kross Ltd, and Tolins Tyres will open for subscription on September 9 and conclude on September 11, while that of P N Gadgil Jewellers will open on September 10 and close on September 12.


Additionally, Arkade Developers is expected to float IPO on September 16 and Western Carriers India may also soon come out with its public issue.


So far this year, more than 50 main-board IPOs have been launched, along with one Follow-on Public Offering (FPO) by Vodafone Idea.


The public issue of Shree Tirupati Balajee Agro Trading Company is underway and IPOs of Baazar Style Retail and Gala Precision Engineering closed earlier this month.


Before that, IPOs of 10 firms, including Ola Electric Mobility and Brainbees Solutions Ltd, the parent firm of online e-commerce platform FirstCry, were concluded in August.


“We believe that the amount raised through main-board IPOs which was Rs 80,000 crore till end of August, will expand to over Rs 1.25 lakh crore by the end of this calendar year,” Equirus’ Aggarwal said.

Sunil Damania, Chief Investment Officer, MojoPMS, said: “As long as the secondary market remains strong, we can expect continued growth in the primary market for IPOs. However, if some IPOs start listing below their offer price, it could reduce this momentum and slow down IPO activity.”

The companies are tapping the primary market to raise funds for expansion plans, retire debt, support working capital requirements and provide exit route to the existing shareholders.


Apart from the main-board, SMEs launching their IPOs next week are — Aditya Ultra Steel, Shubhshree Biofuels Energy, Share Samadhan, Gajanand International, SPP Polymers, Trafiksol ITS Technologies, Excellent Wires and Packaging, Innomet Advanced Materials, and Envirotech Systems.


These companies are aspiring to mobilize between Rs 12-45 crore each through public issue.


The IPOs for Aditya Ultra Steel, Shubhshree Biofuels Energy, Share Samadhan, and Gajanand International will begin on September 9; SPP Polymers and Trafiksol ITS Technologies on September 10; Excellent Wires and Packaging and Innomet Advanced Materials on September 11; and Envirotech Systems on September 13.


Recently, IPOs have garnered significant subscription levels. In August, main-board IPOs were subscribed on an average over 75 times, while the year-to-date average for 2024 is 66 times. For SME IPOs, the average subscription in August was 290 times, with a year-to-date average of more than 259 times, data showed.


Vaibhav Porwal, Co-founder, Dezerv, said the recent surge in SME stocks and strong listings gains in some of the companies are largely driven by three key factors — liquidity, FOMO effect and robust retail participation.

“The fear of missing out (FOMO) on quick gains has spurred continued investment in SME IPOs.”

“While this trend might persist in the short term, risks like market corrections and regulatory interventions could temper the frenzy in the market. Investors should exercise caution and focus on fundamentals, as the SME stocks could correct sharply if sentiment shifts,” he added.


V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said IPOs of SMEs without any track record and sound financials are getting oversubscribed many times, driven by retail investors chasing listing gains. These are excesses that need to be checked.


Recently, the regulator has aired concerns around activity in SME IPOs and experts expect some slowdown in activity in that market.

First Published: Sep 08 2024 | 11:43 AM IST



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