Briefing 15.02.2019

• Sensex had a 6th day of straight losses.  Domestic concerns over industry growth and lower inflation are the main factors for a prolonged week phase in markets
• WPI inflation fell to a record low of 2.76% in January 2019 due to sharp fall in product and food prices.  This gives headroom for RBI  to further reduce interest rates
• Pilot shortage hits Indigo forcing it to cancel flights.  Aggressive expansion plans weighed in without taking into consideration pilots working hours have hit the airline hard
• Oil is on a song.  In 2019 it has increased by 19%.  Cut in output by OPEC countries, sanctions on Venezuela are the main reasons for this increase.  Saudi estimates a break even on its economy only when oil reaches $ 80 to $ 85 per barrel.   Currently Brent Crude trades at $ 65.57 per barrel.  Expect more increases in oil front.
• Jet airways has approved a plan by its lenders to resolve a Rs.8,500 crores debt.  Plan includes conversion of debt to equity, debt restructuring, sale and lease back of aircraft.  Jet will seek shareholder approval on 21st February for conversion of debt into 114 million shares.
• Naresh Goyal may not be the biggest shareholder in Jet after the new approved restructuring plan as a consortium of banks led by SBI will become the major shareholder.  Naresh Goyal will have around 20% (currently 51%) , Etihad 24%.   
• The biggest passenger carrier A380 manufactured by Airbus will become history soon.  Airbus will stop manufacture of A380 from 2021.  Though this aircraft cuts on fuel costs and pollution it calls for significant investment by carriers on airport space, hanger space, wider runways to name a few, which means all seats should be sold to make it economical which is not viable in all situations.  Competition from Boeing's fuel efficient Dreamliner also had a major impact on A380.
• Theresa May again losses vote on Brexit in Parliament.  Voted out on 303-258 on the main motion for reaffirmation of support for May's plan on Brexit
• Germany posted a 0% growth in 4th quarter of 2018, narrowly avoiding a recession.  It was preceded by a 0.2% growth in Q3 of 2018.