The year 2023 seems to have slipped faster than the usual rate of time. Perhaps, it was the effect of so much that was happening in the world which ceased our consciousness into thinking what month we are in and what months have passed by. This accelerated sense of time warrants a thoughtful examination, as it highlights the importance of being cognizant of temporal progressions, especially in a fast-paced world. In the realm of the stock market, the significance of each passing moment cannot be overstated. Each second carries with it valuable insights and learnings, pivotal for informed decision-making in future investment endeavors. This principle forms the basis of our approach in compiling a comprehensive review of the year's most impactful events and their implications. Our aim is to distill these occurrences into actionable knowledge, thereby empowering our investors with a strategic advantage.
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Our carefully curated analysis encompasses a variety of key incidents and developments from the year, each dissected for its unique contribution to the understanding of market dynamics. This exercise is not merely a reflection on the past but is strategically designed to equip our investors with foresight and adaptability for the future. By analyzing these events and their outcomes, we aim to provide a roadmap for crafting a robust investment portfolio for the upcoming year, 2024.
January 2023 -
1) India joins sovereign green bond club with $1 billion sale
India successfully launched its first sovereign green bond issuance, raising 80 billion rupees ($1 billion) to fund its transition to cleaner energy. The offering included equal amounts of 10-year and 5-year notes. The 10-year bonds were priced at a 7.29% coupon rate, slightly lower than the typical rate for similar maturity sovereign debt and below the 7.31% estimated by Bloomberg. This lower yield indicates strong investor interest in supporting India’s environmental projects, aligning with Prime Minister Narendra Modi's goal to achieve net-zero greenhouse emissions by 2070.
India, the world's third-largest carbon emitter, aims to shift away from coal reliance, requiring an estimated $12.5 trillion investment in clean energy by 2050. Proceeds from these bonds will fund renewable energy and climate resilience infrastructure thus impacting positively to company stocks dealing in renewable energy and associated businesses. Indian companies have already issued over $26 billion in green debt, predominantly in dollars, and the government's entry is expected to deepen the market further. With foreign investors showing interest in environmentally focused investments, the government plans a similar offering soon, making green bonds an integral part of India's borrowing strategy.
2) Adani Hindenburg Case
US-based short seller – Research Company – Hindenburg published a report on the Indian conglomerate – Adani Group, issuing a warning against the Indian company on several points of fraud and faking valuations. Post the publication of the reports – stocks of Adani group declined by more than 20% in a single day, marking the first fall of the year 2023. Adani Enterprises Ltd initiated a record ₹20,000 crore ($2.45 billion) secondary share sale amid a significant selloff in Adani group stocks following allegations by U.S.-based short seller Hindenburg Research. The conglomerate, led by Gautam Adani, one of the world’s richest individuals, witnessed a staggering ₹4,17,824.79 crore loss in market capitalisation across its seven listed companies in just two days. The allegations, which Adani Group refuted as baseless, claimed high debt levels and questionable use of tax havens.
The BSE benchmark recorded its biggest single-day loss in over a month, eroding investor wealth by over ₹10.73 lakh crore in two sessions.
February 2023
1) Union Budget 2023
The Union Budget 2023-24, presented by the Indian government, outlined key economic achievements and future plans. India's per capita income doubled in nine years, reaching Rs 1.97 lakh, and the economy grew to become the world's 5th largest. The budget focused on seven priorities, 'Saptarishi,' which included inclusive development, infrastructure, green growth, and financial sector enhancement.
Significant financial commitments included a 66% increase in the PM Awas Yojana allocation to over Rs 79,000 crore, and the highest ever capital outlay for Railways at Rs 2.40 lakh crore. The budget also aimed to boost MSMEs through a revamped credit guarantee scheme and increased the maximum deposit limit for the Senior Citizen Savings Scheme.
To stimulate growth and job creation, a capital investment of Rs 10 lakh crore is planned, marking a 33% increase. Additionally, Rs 75,000 crore is allocated for critical transport infrastructure projects, and a new Infrastructure Finance Secretariat is established to attract private investment.
The National Data Governance Policy was set to be introduced to drive innovation, and the PAN will be a common identifier for government digital systems. Other notable initiatives include the MISHTI project for mangrove plantation, the Mahila Samman Savings Certificate for women's savings, and changes to the tax regime to benefit taxpayers. The budget also aimed to reduce the fiscal deficit to below 4.5% by 2025-26. Market responses were mixed on the budget day, with the Sensex climbing slightly and the Nifty falling marginally.
2) Russia invades Ukraine – 1 year of War
Ukrainian President Zelenskyy stated that Russia is intensifying its offensives in the east and south, aiming to secure gains before Ukraine can bolster its defenses with tanks and other heavy weaponry from allies. As NATO discusses Ukraine's request for fighter jets and long-range missiles, Western nations are considering a new set of sanctions against Russia on the first anniversary of the war. These included targeting additional banks with ties to Moscow and enhancing the enforcement of current sanctions. Meanwhile, Gazprom, Russia's energy giant, faced significant revenue losses in European markets, with experts predicting a potential halving of its export earnings in 2023. January revenues for Gazprom reportedly dropped to $3.4 billion, down from $6.3 billion in the same period last year.
March 2023
1) Naatu Naatu from RRR wins Best Original Song 2023 Oscars
"Naatu Naatu," a song from the Telugu film RRR, made history by becoming the first Indian film song to win an Oscar for Best Original Song at the 95th Academy Awards. It triumphed over tracks by prominent artists like Lady Gaga and Rihanna. Known for its lively tempo and choreography, "Naatu Naatu" gained international popularity. Additionally, the Indian documentary "The Elephant Whisperers" won the Oscar for Best Documentary Short Film, marking another significant achievement for Indian cinema. This documentary, depicting the bond between a couple and an injured baby elephant in India's Nilgiri mountains, is the first Indian production to win in this category. "Naatu Naatu" had previously won a Golden Globe and the Critics' Choice Award for Best Original Song, marking a remarkable period of international recognition for Indian cinema.
2) Credit Suisse collapse
Credit Suisse Group AG faced a critical juncture as CFO Dixit Joshi and his team convened to evaluate strategic options for the beleaguered Swiss bank. The crisis deepened following a severe slump in the bank's shares and bonds, leading the Swiss central bank to provide a $54 billion liquidity lifeline. This move was aimed at stabilizing the bank amidst growing global banking crisis fears, although analysts expressed doubts about its sufficiency.
The 167-year-old lender's troubles can be traced back to a series of scandals, leadership changes, and substantial losses, compounded by a lackluster strategic direction. The bank's decline began in 2021, linked to losses from the collapses of Archegos and Greensill Capital. The situation worsened with the resignation of Chairman Antonio Horta-Osorio in January 2022 due to COVID-19 rule violations and continued with the inability of new CEO Ulrich Koerner’s strategy to reassure investors.
The crisis escalated as rumors of the bank’s impending failure led to massive client withdrawals, totaling 110 billion Swiss francs in the fourth quarter, contributing to an annual loss of 7.29 billion Swiss francs. Despite a capital injection of 4 billion Swiss francs in December, the bank's top shareholder, Saudi National Bank, announced it could not provide further financial support due to regulatory constraints. Over the past year, Credit Suisse shares plummeted by over 75%.
April 2023
1) Mankind Pharma lists at 20% premium over IPO issue price
Mankind Pharma, a pharmaceutical and consumer-health product manufacturer, made a strong debut on Dalal Street with its shares listed at a 20% premium. The company's stocks opened at Rs 1,300 on the BSE and NSE, significantly higher than the issue price of Rs 1,080. Prior to its listing, the shares were already in demand in the grey market, indicating potential double-digit gains over the issue price. Investor interest was particularly high in the Qualified Institutional Buyers (QIB) category. Market analysts, noting the increase in grey market premium especially post-share allotment, had predicted a profitable listing, although dependent on broader market sentiments. Founded in 1991, Mankind Pharma is known for developing and marketing a range of pharmaceutical formulations in various therapeutic areas, as well as consumer healthcare products, boasting over 36 brands.
May 2023
1) Nifty closes at record high of 18,800 for first time
In the month of May 2023, the Nifty 50 index experienced a noteworthy 2.6% increase, bringing it tantalizingly close to setting a new all-time high record. The index reached an unprecedented peak of 18,800, fueled by a sustained positive momentum in the market. The rally was largely driven by robust inflows from Foreign Institutional Investors (FIIs), underscoring their growing confidence in the Indian market. The upswing was the beginning of a consistent upward trend, with the index having gained for four consecutive days. A key factor contributing to this bullish trend is the substantial investment from Foreign Portfolio Investors (FPIs). In May alone, FPIs have injected a massive Rs 37,316 crore into domestic equities. This figure represents the highest level of investment from FPIs in the past six months. The influx of foreign capital can be attributed to the solid macroeconomic fundamentals of India and the reasonable valuation of its stocks. These factors have collectively made the Indian equity market an attractive destination for foreign investors, propelling the Nifty towards potentially record-breaking levels.
June 2023
1) HDFC merger makes it the 7th largest lender in the world
The merger of HDFC Bank and HDFC created the world's seventh-most-valuable bank, with a market capitalization of $154 billion (Rs 12.66 lakh crore). This valuation surpasses both the Bank of China and the Royal Bank of Canada. The merged entity was listed following the allotment of HDFC Bank shares to HDFC shareholders. Foreign portfolio investors hold a 53.93% stake in the merged bank, with significant shares owned by the Government of Singapore and Invesco Markets Fund. Mutual funds and insurance companies have stakes of 19.16% and 8.71% respectively, while retail investors hold 12.81%. HDFC Bank's market value is nearly double that of its rivals, ICICI Bank ($82 billion) and State Bank of India ($64 billion). As part of the merger, HDFC Bank allotted 311.04 crore new shares to HDFC shareholders, with an exchange ratio of 42 HDFC Bank shares for every 25 HDFC shares held. This $40-billion merger became effective on July 1, and HDFC Ltd's shares ceased trading on stock exchanges on July 13.
2) NIFTY crosses 19,000 mark
On June 28th, the Indian equity market reached record highs, driven by strong performance across various sectors. The Nifty index surpassed the 19,000 mark, setting a new all-time high, while the Sensex also achieved a significant milestone by crossing 64,000 during intraday trading. This surge in the Nifty surpassed its previous record of 18,887.6, which was set on December 1, 2022. The rally was supported by gains in both the Nifty Midcap 100 and the Nifty Smallcap 100 indices, each rising by half a percent.
Several positive developments contributed to the upbeat investor sentiment. Key among them was the Securities and Exchange Board of India (Sebi) granting approval for the initial public offering (IPO) of Tata Technologies. Additionally, Deepak Parekh's announcement of a tentative July 1 date for the HDFC-HDFC Bank merger further boosted market confidence. Moreover, a rally in the US market also played a significant role in bolstering investor optimism in the Indian market. These factors collectively contributed to the record-setting performance of the Indian equity market.
August 2023
1) Jio Financial Services gets listed
Shares of Jio Financial Services, the financial services arm separated from Reliance Industries Ltd, a Nifty 50 company, made their market debut at Rs 262 per share. This listing price was closely aligned with the discovered price of Rs 261.85 per share, determined in a special price discovery session on July 20. The session's valuation notably exceeded market expectations, which had predicted a range between Rs 120 and Rs 200 per share.
Reliance Industries previously announced that Jio Financial Services would list on Monday, August 21. Following this announcement, the FTSE index reversed its earlier decision to remove the stock from its indices. This reversal occurred because the stock had not listed within 20 business days of the price discovery session, as initially expected.
September 2023
1) NIFTY hits 20k mark
On Monday, 12th September 2023, Indian frontline indices, Sensex and Nifty, closed with significant gains. The Nifty achieved a new record high, surpassing the 20,000 mark for the first time, reaching 20,008.15 during intraday trading. This new peak, surpassing the previous all-time high of 19,991.85 set on July 20, was achieved in just 36 sessions. Meanwhile, the Sensex, which had reached its all-time high of 67,619.17 on July 20, is now just 492 points shy of this level, having reclaimed the 67,000 mark. Market experts had anticipated this rise in the Nifty, attributing the upbeat sentiment to the positive outcomes of the G20 summit.
October 2023
1) 2023 Israeli invasion of the Gaza Strip
In a major escalation of violence, Hamas militants launched a surprise attack from the Gaza Strip into Israeli towns during a Jewish holiday, resulting in dozens of deaths and abductions. The militants penetrated up to 22 locations, leading to civilian and soldier casualties. Israel responded with airstrikes in Gaza and declared a state of war against Hamas, promising severe repercussions.
The attack, marked by gunbattles and hostage situations, extended as far as 15 miles from Gaza. Israeli forces faced challenges reclaiming a captured police station. Further rocket attacks from Gaza damaged a hospital in Ashkelon, though no casualties were reported there.
The attack was one of the deadliest in Israel for decades, with at least 250 killed and 1,500 wounded. In Gaza, Israeli strikes resulted in 232 deaths and 1,700 injuries. The number of hostages taken by Hamas militants remains unknown. This incident has significantly heightened tensions, with Israel's far-right government strongly reacting to the security breach and ongoing frustrations in the region due to the West Bank occupation and the blockade of Gaza.
November 2023
1) IPO issues leave a lasting mark on the investors
Tata Technologies, Gandhar Oil Refinery India, and Fedbank Financial Services marked their stock market debut on November 30, each opening with significant premiums. Tata Technologies, a subsidiary of Tata Motors, stood out with its shares listing at ₹1,200 on the NSE, a remarkable 140% premium over the issue price of ₹500, making it the best Indian stock market debut since November 2021. The shares further soared to a high of ₹1,400, doubling investors' wealth. The ₹3,042.51 crore Tata Technologies IPO, the first from the Tata Group in nearly two decades, was overwhelmingly received, being subscribed 69.43 times.
Gandhar Oil Refinery also had a strong debut, with its stock listed at ₹298, a 76.33% premium over the issue price of ₹169. The shares quickly escalated to around ₹344, reflecting a premium of over 100%. In contrast, Fedbank Financial Services experienced a more modest start but gained momentum post-debut.
2) Warren Buffett’s Partner – Charlie Munger dies at 99
Charles T. Munger, the influential vice chairman of Berkshire Hathaway and Warren E. Buffett's partner, passed away on November 28, 2023 at 99 in Santa Barbara, California. His death was announced by Berkshire Hathaway. Munger, who left a successful law career to join Buffett, played a pivotal role in transforming Berkshire Hathaway from a struggling textile company into a highly successful investment firm. Despite being overshadowed by Buffett, Munger was a billionaire, with Forbes estimating his fortune at $2.6 billion. He significantly influenced Berkshire's investment strategy, shifting Buffett’s focus from buying troubled companies at discounts to purchasing outstanding businesses at fair prices. Known for his erudition and wit, Munger’s insights and maxims, dubbed 'Mungerisms,' were widely recognized and compiled in books, including "Poor Charlie’s Almanack." His wisdom emphasized the importance of self-honesty and the folly of envy.
December 2023
1) NIFTY and SENSEX at all-time high
The Indian stock markets witnessed significant gains, with the Sensex reaching a new all-time high of 69,894 points and the Nifty surpassing 21,000 for the first time. This surge followed the RBI's revised GDP projection to 7%. Foreign funds showed strong buying, leading to a net inflow of Rs 3,632 crore, though domestic funds were net sellers. Despite the overall market gains, there was selling in some stocks, causing a slight decrease in total investor wealth. The market growth was influenced by factors like the close electoral race, positive GDP numbers, and successful share listings. GST collections for November were also strong, indicating a positive economic outlook. Looking forward, the markets are expected to maintain momentum, with key support levels identified for both indices. The week's activity concluded with the Sensex and Nifty at new highs, bolstered by factors including positive investor sentiment ahead of the 2024 Lok Sabha elections and falling crude oil prices.
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