In this year's last FinMail, we thought let's press the rewind button and take a look at some of the major events related to business and finance around the world & especially in India. Without wasting any time, let's roll the tape backward.
2020 - Probably the craziest year right?
What a roller coaster ride this has been. From extreme highs to extreme lows this year has shown us everything. A year where the word 'Positive' turned out to be the most negative word of the year. We probably don't want to acknowledge this year but this year has some good outcomes as well. So grab your seats, fasten up your seatbelts and let us ride right in!
January witnessed an all-time high of Sensex at 42,273 points due to the initial recovery in Economic Growth after the slowdown. For those who don't remember, this was during the Pre-Covid Era. The rise and the spread of Covid was yet not started in India during mid-January and on January 27, 2020, the first case of Covid-19 was reported in Kerala and the rest is history.
Equity markets all over the world had free-fall after March. S&P 500 fell around 35% while Sensex fell around 40% from its all-time high. After the fall, it rose back by 83.59% and reaching another all-time high of 47,060 points in December due to the recovery and positive vaccine developments around the world.
A New Income Tax Regime was introduced in this year's Budget with lowered Tax Slab Rates. People have the option to select the regime that they want to follow. The dividend is now taxable in the hands of the dividend receiver as per their individual tax slab and with that DDT - Dividend Distribution Tax was abolished. Insurance on bank deposits was raised to ₹5 Lakhs from the earlier amount of ₹1 Lakh.
Due to the fear of Covid 19 spread in India, on 24th March, India went to the harshest economic lockdown. Due to which all the economic activities were put to a halt. All the activities except the essential ones were stopped. Due to this, there was quite a significant change in various production charts. Automakers in India reported ₹0 Sales in the month of April for the first time in history. Due to the production slowdown all over the world and total shutdown in India, the demand for crude oil decreased significantly. The import for crude oil in India fell by 61% during April - August. Prices of Crude Oil turned Negative for the first time in history. Oil Companies were literally paying the buyers of the Crude Oil if they purchased it. You get money and the oil, perfect deal!
Similarly, Gold imports too fell by 47% from April-October with April's fall being the highest at 99.93%. And because India is a large importer of Crude Oil and Gold, there was a huge fall in import bills as well. India's foreign reserves were rising due to this factor. Forex Reserves of India rose to an all-time high of $581.131 Billion as per the latest RBI bulletin. Low imports of crude oil and gold and exports of Agri products made India trade surplus for the first time in 18 years. India remained a net exporter during the Period
Finance Minister and Prime Minister announced a Covid-19 relief Package under 'Aatma Nirbhar Bharat' initiative for ₹20 Lakh Crores across various sectors. The relief Package focused on providing relief in the form of credit and due to which many analysts estimated that actually, the real stimulation of the package would only be around 1% of GDP.
Due to the sudden fall in equity markets, there was unrest in the debt market as well and due to panic redemptions, Franklin India Mutual Fund in April, gave investors the shock of their life when they shut down 6 of its debt category mutual fund schemes, and investors were stuck with their money with no permission to redeem those funds.
Retail investors partied while enjoying the rally after the fall. As everybody was at their home, mostly with no active income, they turned to the stock market to earn some extra money. Record number of people joined the stock market, about 12 Lacs people opened their Demat account with the CDSL during March & April alone. Retail investors were joined by Foreign investors in investing in the equity markets. Because as the market fell, it suddenly became attractive bet for foreign investors to invest in India in a hope that Indian markets will witness great recovery after the fall. This year pretty much remained good for the nation as India attracted more than $30 Billion in FDI during April-September. It was 15% more than the previous year's. India became the country with the highest FDI & FII inflows this year.
This year 15 companies got listed on the Major Stock Exchanges of India against 16 in the last year. IPO investors enjoyed good profits as the average listing gains for each IPO were 35.61%, the highest in a decade! Quite higher than in 2019 — 18.72%. SBI Cards and Payments was the first IPO this year that faced listing losses due to the Covid-19 situation and it also became the reason many companies postponed their IPO plans due to the listing losses despite having good Financial Numbers.
As the doors of the economy were down, it was expected that the GDP growth would narrow down. Everybody remained stunned when the numbers came in and our GDP Growth was negative by 23.9% for the period of April-June, when the lockdown was strictest. And GDP growth rate was -7.9% in the July-September quarter which was little better than the expectations. But India has now entered into a Technical Recession.
Harley Davidson bid goodbye to the Indian Market after low sales and no visible growth. It will now partner up with Hero Motocorp to sell their bikes from Hero Showrooms.
Bank crises became a kind of new normal this year. At the beginning of March, Yes Bank, while in November Lakshmi Vilas Bank was kept under moratorium as both of these were having serious financial troubles arising out of their rising NPAs. In this month, Canara Bank and SBI filed FIRs for a potential bank scam worth ₹8000 Crores.
While the government was providing relief package to revive the economy, Reliance industries was having a party on its own - raising money from the institutional investors around the world. Jio alone got investments of around $20 Billion and Reliance Retail raised $6.4 Billion making the company go debt-free before the set deadline. While the shopping marts were closed in India, a cash-rich Reliance bought out Future Retail and few start-ups as well such as Urban Ladder, Netmeds, EdCast, etc.
Adani went on to take over some major airports' operations around the nation. This year Adani has acquired the Mumbai and Navi Mumbai Airport. Apart from this, it has also taken over the Ahmedabad, Mangaluru, and Lucknow's airport for a lease of 50 years. Further Adani has entered into a deal for Jaipur, Guwahati, and Thiruvananthapuram's airports as well.
After the Covid-19 breakout, China seemed shady to many countries. Many companies decided to move their manufacturing facility out of china. And to woo the companies to move their manufacturing plants to India, India in April has launched the Production Linked Scheme (PLI) targeted towards electronic manufacturing under which government will provide an incentive of 4% to 6% to the companies.
As the festive season was at the doorstep for India, India expected a 'V' shaped recovery. Industries were opened and signs of recovery were visible as the monthly GST Collections were reaching pre-covid levels. UPI made the hustle quick and simple when it comes to one on one bank transfer and payments. The total amount transacted on the UPI platform stood at ₹43.45-lakh crore between 2016 and 2020. Of this, ₹14.26-lakh crore was transacted in six months between March and August 2020. This works out to almost one-third (32.82%) of the total amount transacted on this platform during the last four years.
India's biggest private banking player - HDFC Bank, which was built from scratch and run by its CEO Aditya Puri for 26 years retired on October 26 this year. Under Puri, the bank's net profit has grown from ₹80 lakh in 1994-95 to ₹26,257 crores in 2019-20.
As quoted by Mukesh Ambani, "Crisis is too precious to be wasted."
There were more than 16,000 new firms were registered during the April-July period. This year turned out to be blessing for a tech companies and start-ups. India added 11 new start-ups to its list of Unicorn startups i.e having a valuation of over $1 Billion. Apple Inc. reached a market capitalization of $2 Trillion. While Elon Musk added $140 Billion (500%+ Growth) to his net worth in the year 2020. This growth led him to become the second richest person in the world after Jef Bezos. Speaking of Jef Bezos net worth touched an all-time high of $200 Billion.
Multiplexes and theatres got some real heat in this pandemic and still are. The entertainment and filming industry noted down the potential of OTT Platforms loud and clear. OTT platform became the new movie releasing platform. Lockdowns fastened the growth of OTTs and the future expectations of growth were more than met. And one thing, one series to be specific which made every person with finance and the stock market as their backgrounds way cooler — Scam 1992.
How many of you made Scam 1992's theme song as your call ringtone?
Water Futures got listed as a commodity for the first time on the Commodity Exchange and will now be traded. It happened in California due to the uncertainty and scarcity of water. Well, that was the year 2020 before your eyes. Feel Old Enough? We hope we got every major incident covered over here. Got any more to add to the list?
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We at Your FinMan wish you a great year ahead, enjoy the holidays and we will see you next year ;)
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