24th May 2024 – 31th May 2024 | Another week in the markets
| S&P 500 | Nasdaq | VIX | DJIA | Russell 1000 | NYSE |
| 5,227.51 | 16,735.02 | 12.92 | 38,686.32 | 2,882.75 | 18,083.69 |
| -0.51% | 2.11% | 8.30% | -0.98% | -0.59% | -0.15% |
| Nifty 50 | Gold | Silver | Brent crude | USD-INR | EUR-INR |
| 22,530.70 | $2,347.70 | $30.55 | $81.37 | 83.44 | 90.49 |
| -1.86% | -0.54% | 0.05% | -0.88% | 0.46% | 0.47% |
Source: MarketWatch
Hello Saturday,
This week, Former US President Donald Trump stands convicted on 34 counts of falsifying records to cover up hush money paid to a porn star, Hedge fund manager Bill Ackman plans on taking his firm public and India’s GDP in the quarter ending March grew at 7.8%.
- Donald Trump becomes the first former US President to be convicted of a crime as a Manhattan jury finds him guilty of paying hush money to a porn star, in the run-up to the 2016 presidential election.
- Hedge fund manager Bill Ackman looks to capitalise on his social-media fame by taking his firm public. Ackman is selling a stake in his firm, Pershing Square, which is expected to be valued at about $10.5 billion.
- India’s GDP reports another quarter of stellar growth surpassing the RBI’s 7% growth rate estimate delivered in the April monetary policy review.
- KNR Constructions’ stock refuses to take a breather, climbs over 28% in three weeks
Taking stock | Pronounced guilty! | Bill Ackman’s bold move! | GDP gallops! | Stock soar! | Invest wisely | Another week in the markets
Taking stock
Stocks opened higher on Friday after the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, matched Wall Street expectations and posted a 2.7% rise in April compared to the year-ago period. The Dow Jones Industrial Average added 1.5% to finish May up 2.3%. The S&P 500 gained 0.8% on Friday to end the month higher by 4.8%. The Nasdaq slumped by 0.1% on Friday. Of all the three major bourses, it rose the most by 6.9% in May.
Pronounced guilty!
Former US President Donald Trump was pronounced guilty on 34 counts of felonies for falsifying records in order to cover up the payment of hush money to a porn star. The historic conviction concerns the event that occurred in the run-up to Trump’s 2016 presidential bid, which could, unwittingly, threaten his presidential bid in 2024.
The 77-year-old Trump is a first-time offender with no criminal record. Justice Juan Merchan has scheduled Trump’s sentencing for July 11. The charges levied on Trump are low-level offences that carry no mandatory punishment. Media reports indicate that a prison sentence is unlikely. Justice Merchan has the option to impose penalties ranging from a fine to probation.
Manhattan District Attorney Alvin Bragg who charged the former US President back in April 2023 alleged that Trump had falsified numerous records and documents to hide reimbursements paid to his former fixer Michael Cohen. Cohen received these payments from Trump to ensure the silence of adult movie actress Stormy Daniels, who claimed that she and Trump had once had an affair.
When the case was first announced Trump had termed the prosecution as “politically motivated”. After his conviction by the Manhattan jury, Trump walked out of the courtroom and discredited the proceeding, calling it a “rigged and disgraceful trial”
“The real verdict,” he said, “is going to be on November 5 by the people.”
Bill Ackman’s bold move!
Popular hedge fund manager Bill Ackman is planning to take his firm, Pershing Square, public. To this end, he is looking to sell stakes in his firm expected to be valued at $10.5 billion. The deal, as per media reports, is likely to be closed in the coming days.
By the end of April, Pershing Square was managing net assets worth $16.3 billion. Other fund managers with valuations in the ballpark range of $10.5 billion manage net assets substantially higher than those managed by Pershing Square.
Currently, Pershing Square holds a concentrated stock portfolio of large companies that Ackman believes are undervalued. Chipotle and Universal Music stand out in the firm’s portfolio. Meanwhile, Ackman’s firm has been arguing that it deserves elevated valuations because it plans on investing billions in newer sticky assets.
The listing of Ackman’s hedge fund marks a bold attempt to break through the sour treatment that often greets hedge funds when they look to raise funds from the markets. After an initial flurry of hedge fund debuts, back in 2008- 2009, investors and the public at large seem to have rid themselves of any adoration for hedge funds pretty quickly. This is because the management and performance fees commanded by hedge funds are quite unpredictable coupled with the fact that a strong asset base can suddenly and unanticipatedly shrink and returns can turn out to be no less than a rollercoaster ride.
While the markets have not been receptive to new IPOs in the last few years, a string of successful debuts this year kindles hope that Ackman’s public listing could find a warm reception. Pershing Sqaure has been trying to rebrand itself as an asset manager with “durable capital and less noise”. Most of its capital is locked up in a close-ended fund, Pershing Sqaure Holdings, whose shares trade on European bourses. It is progressively veering away from the disputatious proxy battles and activist short-selling that the firm identified with strongly in its formative years.
GDP gallops!
India’s GDP clocked in a stellar growth rate of 8.2% for FY24 compared to 7% for FY23. For the quarter ending March, India’s GDP grew by 7.8% as per data released by the National Statistical Office of the Ministry of Statistics and Programme Implementation (Mospi) on Friday.
The quarterly growth rate surpasses the RBI’s estimate of 7% made in the April Monetary Policy Review. Real Gross Value Added grew by 6.3% in Q4 of FY24.
“This GVA growth has been mainly due to significant growth of 9.9% in manufacturing sector in 2023-24 over a contraction of (-)2.2 per cent in 2022-23 and growth of 7.1 per cent in 2023-24 over 1.9 per cent in 2022-23 for the mining sector,” the NSO said in a press release.
For the whole of FY24, GVA grew by 7.2% contrasted with the 6.7% growth rate clocked in FY23.
“It is worthwhile to note that the manufacturing sector witnessed a significant growth of 9.9 per cent in 2023-24, highlighting the success of the Modi government’s efforts for the sector. Many high-frequency indicators indicate that the Indian economy continues to remain resilient and buoyant despite global challenges. India’s growth momentum will continue in the third term of PM Shri @narendramodi-led government,” Finance Minister Nirmala Sitharaman posted on X after the release of the GDP data.
Stock soar!
KNR Constructions’ stock refuses to take a breather. In the last three weeks, the stock has rallied by 28%, hitting a 52-week high of ₹315 on Friday. Thanks to a strong order book, the stock surged by 13% in the last two trading days of the week.
Contributing to the stock’s ascent is KNR’s presence in major road and highway projects. Besides being present in irrigation and urban water infra management, the company is also targeting a foray into the construction of metro and rail projects.
As of the March-ending quarter, KNR’s order book stood at ₹5,304 crore, out of which ₹3,198 crore comes from the road sector and ₹2,106 crore from irrigation and pipeline sector.
Given the slow pace at which the National Highway Authority of India awards contracts, the company is actively exploring partnerships for BOT and non-road segment projects. Analysts believe that the company’s tender pipeline is healthy and strong order flows are expected post-elections. Market analysts expect execution to be flattish in FY25 followed by robust growth in FY26.
Source: Google Finance
Invest wisely
Investing requires one to be patient. A sure-shot way of losing money in the markets is to try to multiply your money too fast. There are a lot of scam artists in the Indian ecosystem who promise to deliver mouth-watering returns in unbelievably small time windows. The only defence against such conmen is to arm yourself with a healthy dose of scepticism and conduct deep research and due diligence before allocating your funds. It does one weel to commit the following matra to mind: If it is too good to be true, it probably is. This is where Appreciate can come to your help. We understand the value you place on the safety and security of your funds. With the Appreciate app by your side, you can navigate the ups and downs of the global markets with unshakable trust and quiet confidence.
Warm regards,
Another week
in the markets
