The week ahead, in charts: LIC IPO, US Fed meet

Every Monday, Mint’s Plain Facts section features key data releases and events to look for in the coming week. The much-anticipated initial public offer of the Life Insurance Corporation of India will be launched this week. The US central bank will announce its monetary policy review this week as emerging economies stay nervous over its moves. In the cultural sphere, Potterheads will drool over the International Harry Potter Day. Here’s more.

1.LIC IPO

After weeks of waiting, the IPO of the country’s largest insurance company will hit the markets on Wednesday for the general public. It will remain open for bidders till 9 May. The price band of the IPO has been fixed at ₹902-949 per equity share. Policyholders and employees of the company will receive a discount of ₹60 and ₹45 per share, respectively. The government, which wholly owns LIC, expects to raise ₹21,000 crore by selling 3.5% of its stake in the company. This would be the country’s largest such sale. The insurance behemoth is valued at ₹6 trillion.

The IPO is also expected to bring new investors to the market. Experts from financial services companies expect a surge in demat account openings because of LIC’s IPO. This also may not be the government’s only move to privatize LIC as the company had hinted at further disinvestment. However, such details are yet to be made public.

2.India PMI

The surge in price pressures because of the Ukraine crisis led to a decline in India’s manufacturing Purchasing Managers’ Index (PMI) to a six-month low of 54.0 in March. However, the impact was not the same for services. On the contrary, services PMI rose to 53.6 in March from 51.8 in February. In April, with disruptions caused by the Ukraine crisis still lingering, both manufacturing and services activity may have been under pressure. The rise in commodity prices across the world and the dent on global growth will hamper overseas demand. The data due to be released for manufacturing PMI on Monday and services PMI on Thursday will show how domestic demand stacks up. Domestic inflation has not been of any relief either and several companies are being forced to hike prices, which could have hampered demand in the country as well. The continuing supply-chain issues may have been an additional pain point.

 

3.FOMC & BoE meet

Inflation was already a cause for concern for the US and UK, and the Ukraine crisis exacerbated the situation further, setting expectations of another round of rate hikes by both their central banks. Retail inflation in the US surged to 8.5% in March, the highest in over four decades, while the UK also saw a three-decade high of 7.0%. Analysts will keep a close eye on the decision by the US Federal Reserve and the Bank of England (BoE) this week.

The Fed had hiked the interest rate by 25 basis points in March and is now widely expected to raise it by another 50 basis points. The BoE is expected to hike the rate for the fourth straight meeting. With interest rate hikes largely priced in, analysts would also be interested in the central banks’ growth forecasts and views on growth-inflation dynamics.

 

4.Tata Steel earnings

Tata Steel is expected to announce its earnings for the January-March quarter on Tuesday. It is likely to report a net profit of ₹9,808 crore, up 2% quarter-on-quarter and 37% year-on-year, according to an estimate by brokerage firm ICICI Direct. Earlier this month, the company said its India business had clocked its highest-ever crude steel production of 19.1 million tonnes in 2021-22, a 13% growth. However, the steel producer has seen cost increases on key raw materials such as coking coal because of the Russia-Ukraine war. This has added to cost pressures for the company. Tata Steel also announced that it will stop doing business with Russia. Nonetheless, the company’s chief executive officer, T.V. Narendran, recently explained that margins will expand in the immediate term as “the price increases are ahead of the cost increases". The impact of high input cost would be felt towards the end of next quarter.

5.International Harry Potter Day

Potterheads worldwide will celebrate International Harry Potter Day on Monday. According to the last book of the fantasy series, on this day in 1998, Harry Potter, along with his friends and the Order of the Phoenix, defeated the dark wizard Lord Voldemort in the battle of Hogwarts. In 2012, then UK Prime Minister David Cameroon had officially declared 2 May as the date to commemorate the widely-loved book series.

There are many ways in which you can celebrate today, from re-reading your favourite chapters, binge-watching the movies, checking out some of the official spin-off books and fan fiction, or hosting or participating in a Harry Potter trivia night.

Despite all the love the series has received, one cannot disassociate it with its creator J.K. Rowling and the controversy with regard to her alleged transphobic comments. Her views drew widespread criticism from fans and also several lead actors of the film series.

 

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