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Weekly Feed Mins Read

Kristal Weekly Feed | 22nd July 2019

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All you need to know, in under 1 minute.

Here’s a concise report on what made headlines in the global market last week.

Positives

  • PepsiCo closes $1.7 Billion Deal with South Africa’s Pioneer Food Group
  • Growth spurt for India’s ETF market; Centre raises over Rs 10,000 crore via CPSE ETF

Negatives

  • S&P 500, NASDAQ stocks fall; see the worst week since May
  • Netflix loses U.S. subscribers and $18bn in stock market value
  • Oil prices rise as U.S.-Iran tensions grow

 

Now, for more detail.

 

Positives 

1. PepsiCo closes $1.7 Billion Deal with South Africa’s Pioneer Food Group 

What You Should Know

On 19th July, PepsiCo declared that it has closed a U.S. $1.7 billion deal with Pioneer Foods Group Ltd, which is one of the largest producers and distributors of a range of branded food and beverage products in South Africa. The acquisition is supposed to be a major boost to South Africa’s economy, as well as help PepsiCo gain an amicable expansion into sub-Saharan Africa by enhancing Pioneer Food’s manufacturing and go-to-market capabilities.

What You Should Lookout For 

At the moment, Pioneer exports to more than 80 countries, and its agreement with PepsiCo might just open avenues for other foreign investors who would want to come to the country for bargains. This may just be the beginning of a great economic boost in South Africa, and could open investment opportunities soon.

Suggested Reading:

PepsiCo to buy South Africa’s Pioneer Food for $1.7 billion

 

2. Growth spurt for India’s ETF market; Centre raises over Rs 10,000 crore via CPSE ETF 

What You Should Know

A massive boost to India’s disinvestment receipts in FY19, the Centre has raised over Rs 10,000 crore on a net basis from the fifth Further Fund Offer (FFO) of the CPSE ETF, mobilising 53% of the receipts. This was a record Rs. 26,350 crore from CPSE ETF and Rs. 18,730 crore from Bharat-22 ETF.

What You Should Lookout For 

The good news is it could repeat in FY20 as well. Besides the two extant ETFs, it may launch three new sectoral ETFs consisting of PSUs in financial sector, energy, and metal and commodity. Sure it is a good time to invest in ETFs!

Suggested Reading:

CPSE ETF sees demand of Rs 40,000 crore, oversubscribed 5 times

 

Negatives 

1. S&P 500, NASDAQ stocks fall; see the worst week since May

What You Should Know

Stocks fell on Friday posting the worst week since May! The S&P 500 closed 0.6% lower at 2,976.61 while the Nasdaq Composite slid 0.7% to 8,146.49. The indices lost most of their earlier gains after Iran said it captured a British oil tanker. For the week, the S&P 500 and NASDAQ fell more than 1% each.

What You Should Lookout For 

The New York Federal Reserve President John Williams said Thursday that the central bank should “act quickly” when the economy loses some steam. “It’s better to take preventative measures than to wait for disaster to unfold” he claimed. Hopefully, this will not be a long wait for investors across the globe.

Suggested Reading:

Stocks fall, S&P 500 and Nasdaq post worst week since late May

 

2. Netflix loses U.S. subscribers and $18bn in stock market value

What You Should Know

Earlier this week, Netflix lost U.S. $18bn worth of stock market value overnight after subscriber numbers fell in the U.S. for the first time in eight years. Netflix blames the price rise for this loss, as in the U.S., consumers had to pay $13 per month for the most popular plan now.

What You Should Lookout For 

At this time, Netflix’s bigger concern is what happens when its new competitors have established themselves. Since its business is built on the back of leasing content from other companies, only time will tell what in the store.

Suggested Reading:

Netflix sees $18bn wiped off stock market value as US subscriber numbers fall

 

3. Oil prices rise as U.S.-Iran tensions grow

What You Should Know

After steep losses on Thursday and rising tensions between the United States and Iran, oil prices rose about 1 percent on Friday. For the week, benchmark crude prices declined, having fallen sharply earlier in the week on demand worries. West Texas Intermediate dropped 7 per cent for the week and Brent lost about 5.5 per cent for the week, the steepest losses for both benchmarks since late May.

What You Should Lookout For 

According to a Reuters report, the IEA is reducing its 2019 oil demand growth forecast to 1.1 million barrels per day (bpd) from 1.2 million bpd due to a slowing global economy amid a U.S.-China trade spat.

Suggested Reading:

Oil climbs as Middle East tensions offset demand worries

Disclaimer

The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.

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