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Abhishek Murarka

@abhymurarka
2 years ago ~1440 views
Some quick notes from RBI annual report for FY22. A thread:

1. Financial savings hit a two-decade high. It is not just currency and bank deposits most financial assets have grown.
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Abhishek Murarka

@abhymurarka
2 years ago ~220 views
2. Indian stock markets outperformed most markets in the world in FY 21-22. The total market capitalisation of BSE listed companies surged by 29.2% to INR 264.1 lakh crore versus SENSEX gains of 18.3%!
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Abhishek Murarka

@abhymurarka
2 years ago ~200 views
3. This outperformance was despite foreign investors selling for most of last year (2021-22), while mutual funds were consistent buyers. This in turn indicated higher SIP inflows as number of demat accounts more than doubled.
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Abhishek Murarka

@abhymurarka
2 years ago ~200 views
4. Banking Health: Gross NPA ratio of all SCBs moderated to its lowest level in 6 years. Banks raised capital to augment risk absorbing capacity. This combined with highest ever profits in a year places Banks in a good spot for new credit cycle.
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Abhishek Murarka

@abhymurarka
2 years ago ~220 views
5. Two largest import components are Oil and Gold

On oil: Most of India's oil imports come from Iraq, followed by Saudi Arabia and UAE. Russia ranks number 9 (less per year than what Europe imports per day). Good news is we are going to import more and its 15-20% cheaper. See here:
https://twitter.com/lisaabramowicz1/status/1530104019313647616?s=20&t=jjr78-bMTPtb_5ihtFSrKw

On Gold: India imports around 10%. Its total gold imports from the UAE, which is likely to increase in the wake of the successful
implementation of a Free Trade Agreement (FTA).
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Abhishek Murarka

@abhymurarka
2 years ago ~220 views
6. Non oil, non gold areas where imports grew in 2021-22 over 2020-21 - vegetable oil, electronics. Infact, India is the largest importer of vegetable oil. Seeing lower import dependence in areas like Defense, Cotton, Paper, Capital Goods, transport equipment etc

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Abhishek Murarka

@abhymurarka
2 years ago ~210 views
7. Good chart on inflation across various sub-groups. Focus on the red line in spider-web chart. The areas with highest impact are Oil & fats, meat and fish, non-alcoholic beverages - the household consumption items (this is felt more by lower strata of economy).
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Abhishek Murarka

@abhymurarka
2 years ago ~220 views
8. The RBI Balance Sheet:
Two observations
a. 37% increase in Gold reserves from 1.43 lakh crores to 1.97 lakh crores. This helps in ensuring Rupee-dollar stability.

b. There is 54% increase in Loans and Advances, mainly from Reverse Repo Lending (Foreign), up from 9100 cr to 75000 cr+. If someone knows, please explain what's this.
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Abhishek Murarka

@abhymurarka
2 years ago ~270 views
9. The RBI Profit and Loss statement:
One aspect that stands out is the huge jump in provisions from 20700 crores to 1,14,700 crores which dented profits (available balance for Govt transfer).

Wonder what's this? These are transfers to Contingency Fund (CF). The RBI made a large transfer to its contingency fund in 2021-22 in order to maintain the minimum level of risk provisions. As a result of this, the surplus available to transfer to the government fell to the lowest on record.
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