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FPIs infuse Rs 12,000 cr in Indian equities in Sep on hopes of slow rate hikes 

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Foreign investors pumped Rs 12,000 crore into the Indian equity market so far this month on hopes that global central banks, particularly the US Fed, may go slow on rate hikes as inflation starts to cool off. This comes following a net investment of staggering Rs 51,200 crore in August and nearly Rs 5,000 crore in July, data with depositories showed.

FPIs turned net buyers in July after nine straight months of massive net outflows, which started in October last year. Between October 2021 till June 2022, they sold a massive Rs 2.46 lakh crore in the Indian equity market.

According to data with depositories, FPIs (foreign portfolio investors) pumped a net Rs 12,084 crore into Indian equities during September 1-16. They were net buyers on hopes of continued growth momentum, even as global and domestic data prints were adverse with elevated inflation reported across major economies, Chouhan said.

Also Read: FREED: This startup helps borrowers get out of the debt trap – Here’s how 

“Foreign investors continued to invest into Indian equities on expectation that global central banks, particularly US Fed, may go slow on rate hikes as the inflation starts to cool off,” Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said.

Additionally, given Indian equities would be an attractive investment destination as inflation cools off and the economy embarks on growth trajectory, FPIs would have preferred to stay invested than losing out on that opportunity, he added. Also, Indian equities went through a correction phase making them relatively attractive on valuations. This provided them a good buying opportunity to hand-pick high quality companies.

The sustained FPI buying that started in July and gathered momentum in August and continued in September too, supported the recent rally in the Indian market.

However, they turned sellers in last few days of the current month on fears of global economic slowdown. FPIs are likely to wait and watch before resuming their buying in India, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

Morningstar India’s Srivastava said the recent CPI data in the US disrupted the trend of cooling inflation, thereby dashing hopes that the US Fed could take breather after September and ease up on its interest rate hikes. The August US inflation edged 0.1 per cent higher from the preceding month to 8.3 per cent. Compared to the year-ago period, it eased from 8.5 per cent.

Apart from equities, FPIs infused a net Rs 1,777 crore in the debt market during the month under review. In addition to India, Indonesia and the Philippines witnessed inflows, while Taiwan, South Korea and Thailand witnessed withdrawals during the period under review.

Petrol, Diesel Price Today, 15 Sep 2022: Fuel cost static; check rates in Delhi, Noida, Mumbai, other cities

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel has been kept steady on Thursday, 15 September 2022, keeping costs steady for more than three months now. Petrol and diesel in Delhi is priced at Rs 96.72 and Rs 89.62 a litre, respectively. In Mumbai, petrol is retailing at Rs 106.31 per litre and diesel at Rs 94.27 per litre. The last country-wide change in price came on 21 May 2022, when Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre, and Rs 6 per litre on diesel. Since then, Maharashtra is the only state to have cut rates. The Maharashtra government had announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel in July.

Also read: Bank Nifty must hold above 41250 to hit new lifetime high; buy ICICI Bank, SBI stocks on dips to pocket gains

Also read: Rupee likely to depreciate on strong dollar, elevated crude prices; USDINR pair to trade in this range

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Mumbai: Petrol price: Rs 106.31 per litre, Diesel price: 94.27 per litre

Delhi: Petrol price: Rs 96.72 per litre, Diesel price: Rs 89.62 per litre

Chennai: Petrol price: Rs 102.63 per litre, Diesel price: Rs 94.24 per litre

Kolkata: Petrol price: Rs 106.03 per litre, Diesel price: Rs 92.76 per litre

Bengaluru: Petrol: Rs 101.94 per litre, Diesel: Rs 87.89 per litre

Lucknow: Petrol: Rs 96.57 per litre, Diesel: Rs 89.76 per litre

Noida: Petrol: Rs 96.79 per litre, Diesel: Rs 89.96 per litre

Gurugram: Petrol: Rs 97.18 per litre, Diesel: Rs 90.05 per litre

Chandigarh: Petrol: Rs 96.20 per litre, Diesel: Rs 84.26 per litre

Public sector OMCs including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with international benchmark prices and foreign exchange rates. Any changes in petrol and diesel prices are implemented from 6 am every day. Retail petrol and diesel prices differ from state to state because of local taxes like VAT or freight charges.

Mcap of BSE-listed firms at all-time high of Rs 282.66 lakh cr

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The market capitalisation of BSE-listed firms reached an all-time high of Rs 282.66 lakh crore on Thursday, helped by a rebound in equities.

The 30-share BSE Sensex climbed 659.31 points or 1.12 per cent to settle at 59,688.22 after falling in the previous two trading days.

Also Read: Sensex ends at nearly 1-month high; Nifty may hit 18100, momentum indicator enters into bullish crossover

“A solid rebound was the order of the day at Dalal Street as stocks simply zoomed in today’s session. The credit for the rally can be given to overnight positive Wall Street cues and also to the fact that crude oil prices continued to tumble. Crude oil prices are trading at their lowest levels after February,” Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities Ltd.

Tech Mahindra, Axis Bank, ICICI Bank, Mahindra & Mahindra, Bharti Airtel, State Bank of India, UltraTech Cement, Bajaj Finserv, IndusInd Bank and Asian Paints emerged as the biggest gainers among Sensex stocks.

Tata Steel, Titan, NTPC, Nestle and Power Grid were the laggards.

In the broader market, the BSE smallcap gauge climbed 0.60 per cent and midcap index ended higher by 0.29 per cent.

A total of 2,062 stocks advanced, while 1,402 declined and 125 remained unchanged.

In Asia, markets in Seoul and Tokyo ended in the green, while Shanghai and Hong Kong settled lower.

Equities in Europe were trading on a mixed note during the mid-session deals. The US markets had ended significantly higher on Wednesday.

Meanwhile, the international oil benchmark Brent crude dipped 0.49 per cent to USD 87.57 per barrel.

Rupee to depreciate on strong dollar; falling crude prices may cap downside, USDINR to trade in this range

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By Raj Deepak Singh

Rupee depreciated this week to a new all-time low and touched 81.2750 level amid sharp rise in US dollar index. Further, rupee was pressurised by weakness in domestic equity markets and fresh FIIs outflows. Dollar index surged by almost 2% to a fresh two-decade high this week after the Federal Reserve raised interest rates by another 75 basis points as expected and signalled larger increases at its upcoming meetings. Further, steep rise in US 10 years’ treasury yields supported US dollar. Moreover, continued better macro-economic data from the US supported dollar. The number of Americans filing new claims for unemployment benefits rose to 213,000, below market expectations of 218,000.

We expect the US dollar to appreciate further in the coming week and surpass new two-decade highs of 111.82 to touch 113 level amid expectations of a further aggressive interest rate hike from the US Fed in the coming meetings. Euro gained some support as the German government said they will provide urgent financial support to regional state-owned energy providers, which are struggling to cope with soaring gas prices. Weakness in crude oil prices should provide a cushion to rupee post sharp fall towards 81 levels. Moreover, Investors will keep an eye on interest rate decision from RBI and major economic data from the US like CB consumer confidence and GDP data.

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Reserve Bank of India is also expected to rise interest rate from 5.40% to 5.90%. which will eventually help Indian bond yield to rise further. USDINR traded largely in a triangle pattern where it traded towards the support level at 79.20 and then rebounded back towards the resistance level of 81.00. The pair is expected to continue trading in upward trend towards the level of 81.30 after breaking the resistance level of 81.00. However, upsides seem capped for time being as there are some supportive factor for INR whereas rise in Dollar index should limit gains so we expect a consolidation in INR.

Also Read: How do new internet IPO companies fare when it comes to valuation and profitability?

(Raj Deepak Singh is an Analyst – F&O, Currency, and Commodities at ICICIdirect. The views expressed are the author’s own. Please consult your financial advisor before investing)

Govt to soon announce sugar export quota for 2022-23 market year: Food Secretary 

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The government will soon announce export quota of sugar for next marketing year starting October, Food Secretary Sudhanshu Pandey said on Monday. He however did not disclose the quantity of sugar that will be allowed for export in 2022-23 marketing year.

“We will soon announce the sugar export policy for next season,” Pandey told reporters here on the sidelines of 82th AGM of Roller Flour Millers Federation of India (RFMFI). In May, the government had allowed exports of 100 lakh tonne of sugar, but later allowed another 12 lakh tonne. This took the total export quota for 2021-22 marketing year to 112 lakh tonne.

Also read| Sugar export volume to drop by quarter on low stocks

“We would like to request the government to allow 80 lakh tonne of exports for 2022-23 SS (Sugar Season),” the ISMA president had said in the letter. As per preliminary estimate, Jhunjhunwala said the net sugar production, without considering the diversion of sugar for production of ethanol, is expected to increase to about 400 lakh tonne in 2022-23 from 394 lakh tonne in current marketing year. However, he said 45 lakh tonne of sugar are expected to get diverted for ethanol in 2022-23 as against 34 lakh tonne in current marketing year. This means that actual sugar production in 2022-23 would be 355 lakh tonne, the ISMA president said.

Also read| Govt relaxes sugar export quota for 2021-22; allows additional 1.2 mn tonne shipments

“Therefore, after considering domestic sugar consumption of 275 lakh tonne in the next season (2022-23), it becomes imperative to export at least 80 lakh tonne of surplus sugar out of the country in order to maintain optimum sugar balance in the country,” Jhunjhunwala said. Exports of surplus sugar would also help in maintaining domestic sugar prices, which in turn will boost liquidity position of mills, enabling them to pay sugarcane farmers on time.

The ISMA president mentioned that the sugarcane crushing operations in 2022-23 is expected to start from October first week itself because of huge cane availability. Jhunjhunwala urged the government to announce the export policy for 2022-23 at the earliest so that mills can enter into future contracts and also plan their production in advance.

“A certain amount of inflation is healthy given the redistribution impact”

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The Reserve Bank of India is clear that it wants to bring the consumer price index-based (CPI) inflation to 4% on a sustainable basis. While stating that the RBI seems confident of achieving this goal, Shamika Ravi, member, Prime Minister’s Economic Advisory Council, however, noted that some aspects of food inflation are not necessarily bad, given that these entail transfer to producers. In an interview with Priyansh Verma, the noted economist also highlighted the credibility loss being faced by global rating agencies, and opined that their parameters to assess the subject entities including sovereigns are biased in certain way.

Q. In a recent article, you had mentioned that socioeconomic surveys in India have tended to have a “rural bias”. Could you elaborate on this?

Q. What is the solution to this?

A. Since the census is a decadal exercise, the least one can do is to change the framework for conducting surveys. The framework should be based on the population projections, which are done every time the census is conducted. The sampling methodology for the surveys should look at the population projections, not the census. The projections have a lesser bias as they take into the account the past rate of urbanisation. The urban rate is not linear.

Q. There is also a lag in releasing key surveys, such as PLFS…

A. We need the (PLFS) reports to come out sooner. There is an issue of representation and the response rate as well. We have found that rich people don’t want to participate in surveys. This leads to bias. Data quality needs to improve. We have a lot of data, but need to improve their quality

Q. You recently criticised Moody’s Investor Service comment on Manipur. Do you feel that global rating agencies, such as Moody’s, Fitch, and S&P need to change the way they assess India’s macroeconomic fundamentals and government finances?

A. I believe the methodology that they use for assessment should not be so opaque. One needs to know how the ratings are making assessments of India’s macroeconomic fundamentals, the weightage they assign to different parameters such as, say, the Manipur incident. In many surveys that rating agencies put out, there is apparently a considerable amount of subjectivity. And that subjectivity is biased in a certain way. These agencies are going through a credibility crisis globally. If I were into capital markets, I would have looked at the rating that these agencies give and the actual flow of money.

Q. How do you see the impact of the ongoing Israel-Hamas on India’s economy?

A. Rising energy prices are obviously going to impact India. We are concerned with rising prices, whether it’s in account of the Russia-Ukraine war or the Israel-Gaza war. Anything that affects my growth rate quarter to quarter is a problem. The global economy is quite tumultuous. We are $2,300 per capita income economy. Our growth is non-negotiable. So far, we have been able to manage our growth.

Q. Can we attain 4% CPI inflation on durable basis by next year, as RBI projected, given there are risks to food inflation?

A. The RBI seems confident with its projections. It seems we’ll meet (the projections). But it may be noted that some aspects of food inflation are not bad. Particularly from the agriculture sector, this is a transfer to producers. High food inflation, with respect to some commodities, is not a cause of alarm the way it’s made out to be. A certain amount of inflation is healthy and there is a redistribution impact in the economy.

Q. RBI has often been not accurate on its inflation projections. They revised Q2 CPI projections thrice…

A. That tells you that we need to have better estimates. There is no substitute to data quality. An institution which has so much research capacity. RBI’s estimates have to get better with time.

Continuing rural woes: No cogent evidence yet of a rural revival, the problem is more than cyclical

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The latest set of numbers put out by the leading fast moving consumer goods companies doesn’t inspire much confidence about the state of demand in rural India. Nor do many other proxy markers of the rural economy, like farm credit/exports or reservoir water levels, which indicate that the consumption demand in the rural sector hasn’t really recovered from the shock of the second wave of Covid. The rural woes had worsened even before the pandemic—the World Bank estimates that real rural wages in India have stagnated over the last decade. With elevated inflation, real wages in the hinterland are seen to have fallen through FY23 and much, if not all, of H1FY24. This sharply contrasts with the decent 7.5% growth reported for private consumption expenditure in the last fiscal year, and the Reserve Bank of India (RBI) survey that showed a four-year peak in overall consumer confidence in September 2023. Clearly, it is the urban areas that are holding the fort.

Though the crop damage caused by unseasonal (pre-monsoon) showers and uneven distribution of monsoon rainfall may have contributed to the longevity of the rural torpor, it has deeper underlying reasons. There is a shift in terms of trade away from the farmer and the average rural worker/trader, contrary to what policymakers claim. Wages are nearly half of rural household income, and well over a third is realisation from farming. There has been a lack of policy impetus to boost farm- and non-farm wages over several years. At the same time, the income support to farmers in the forms of minimum support prices (MSPs) and direct cash transfers (PM Kisan) have seemingly been offset by high inflation. The rise in farmers’ income has lagged that of other sections of the society, including large companies, and HNIs, undermining the rural purchasing power.

However, since the infirmity of the sector is not seasonal, it is necessary to address the issue with a well-planned policy response. To be sure, the stagnant rural sector reflects a larger structural shift in the economy, the brunt of which is borne by small businesses and (highly leveraged) households. The recent policy steps, like seeking to contain food inflation through easing of imports and curbs on exports, would only aggravate the problem. What’s needed is sustained effort to raise farm productivity and output, and improve price discovery of farm produce.

FII buying trends in India: With current resilience in domestic, global markets, will buying sustain?

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By Ram Kalyan Medury

The capital markets of any country are the sum total of all buy and sell actions of all participating investors. There are 3 broad categories of such investors in the markets –

The FII investment trends depend on a lot of factors, but primarily:

the global economy,the economic outlook of the country of the institutional investor andthe economic outlook of the market where the investment is targeted

For instance, FII ownership in the BSE500 index had fallen from near record highs of 21.5% in December 2020 to a decade low of 18.4% by June 2022. Why has this percentage dropped significantly? Here are some factors, while noting that the majority of the FIIs investing in India hail from the US.

The current global geopolitical issues due to the Russia-Ukraine war have set into motion a supply crisis from gas to grains. Inflation triggered by the war and excess liquidity introduced during the Covid-19 pandemic, have made central banks in the West take a tough stance on rate hikes.

The US and the western economies are reeling under high inflation. The consumer price index (mark of inflation) in the US, is at a high of 9.1, the highest since 1981. Fed Chairman Jerome Powell recently made clear that the Fed would continue an aggressive rate hike to reduce inflation.

India has been able to mitigate the impact of high inflation, despite crude reaching $120/barrel. GDP numbers for Q1 of FY2023 were promising at 13.5% per the government-released data. Economic recovery is looking strong across services and manufacturing.

Also read: Wall Street extends losses, US stocks tumble amid Fed tightening jitters, economic rumblings

Based on this data, here is how the FII flows have reversed in the last few months as the economic data in India and the overall narrative have reversed.

Calendar YearTotalJanuary-28526February-38068March-50068April-22688May-36518June-51422July1971August56521September **5066Total 2022-163732

The Ukraine-Russia war is no longer grabbing headlines, with investors more concerned about commodity prices and interest rates, rather than the end of the war. However, we are clearly not out of the woods. The Russia-Ukraine war has not ended and may even take a turn for the worse. While Fed interest rates are now factored in, the expectation that rate hikes will moderate may not materialise as inflation continues to be high and negative surprises can have a global impact There is an expectation among many Western analysts that the overall equity returns will be subdued from most major economies till early 2023. Given these conditions, the net FII flows in this calendar year may remain negative, though the trend now seems to be reversing.

The FIIs being such a dominant force on the markets, sway the markets considerably when they invest or exit. An FII sell-off can actually usher in a market correction. But this trend has changed in India, especially post-pandemic. Retail participation in the markets has increased significantly. There were close to 1.4 crore new Demat accounts opened in FY 2021 alone. The retail participation through mutual funds, ULIPs, Hybrid funds, and Balanced funds have all added up to approximately $14-15 billion in SIPs annually. These inflows are acting as a cushion against any major FII sell-off.

For instance, the DII flows between April 2021 & August 2021 were $7.1 billion. Whereas, FII flows during the same period were just $2.4 billion. During this period, Nifty has gained close to 15%!

Also read: Warning signs flashing for global recession in 2023, as interest rate hikes threaten economic growth

Despite the dull global outlook, India has stronger growth fundamentals compared to other EMs. The Indian domestic economy has shown strength and resilience. The long-term India story not just remains intact but has become stronger post-Covid and Ukraine due to realignment in global supply chains and various other reforms and initiatives undertaken. This augurs well in the long term for the Indian economy and it enjoys the confidence of investors and analysts alike. FIIs have also realized this and sense that the growth engine for the rest of this year for the world, would come from India. Thus, we would be able to see continued inflows from FIIs in the near future.

(Ram Kalyan Medury is the Founder & CEO, Jama Wealth, SEBI Registered Investment Advisor. The views expressed in the article are of the author and do not reflect the official position or policy of FinancialExpress.com.)

Meet Sonali and Manit Rastogi, the duo behind Surat Diamond Bourse; check EXCLUSIVE images of the world’s largest building and know about their journey

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Around 90 per cent of the world’s diamonds are cut in Surat and now the city is all set to add another feather to its cap with the newly-opened Surat Diamond Bourse. The building has surpassed the Pentagon as the world’s largest office building.

For the unversed, the Surat Diamond Bourse (SDB) is a diamond trade centre and it will be inaugurated by Prime Minister Narendra Modi in December. The complex is expected to accommodate 67,000 diamond trade professionals across 4,700+ offices. Built at a cost of Rs 3,200 crore, construction of the complex started in 2017 and it is the largest office space in the world.

Who are Sonali and Manit Rastogi?

Sonali Rastogi and Manit Rastogi are Founding Partners at Morphogenesis, one of India’s leading Architecture and Urban Design practices, listed among the top 100 Architectural Firms globally. Both Manit and Sonali have significantly influenced the emerging generation of Indian architects through their involvement in architectural education and as role models for the profession.

Sonali is a leading speaker on sustainable architecture and has lectured at numerous reputed universities and conferences worldwide. She has brought significant attention to gender issues. Today, Morphogenesis stands as an exemplar of the profession for equal opportunity and gender pay parity. A strong proponent of the arts and crafts, Sonali is a founder of Manthan, a platform for creative individuals seeking to share, discuss, and evolve concepts and ideologies.

Manit is a thought leader in the field of sustainable design and has also lectured extensively. He has been on numerous global jury panels and published several research papers on zero-energy buildings. His commitment to a sustainable environment goes beyond the realm of architectural practice—as a founder member of The GRIHA Council, India’s own Green rating system, Manit has worked with urban policymakers to spearhead initiatives with an emphasis on environmental sensibility and social welfare.

About their family and early life

Sonali comes from a family of architects. Growing up in an environment where her living room functioned as an architectural studio, Sonali developed a keen interest in reading, model making, and observing built structures when travelling. Her childhood paved the path for her education and career in architecture.

Manit has had a multicultural upbringing — he grew up in Africa, went to a boarding school in England, and returned to India for his Bachelor in Architecture education in 1986. He comes from a family of engineers but did not want to continue in the same profession. He always knew that he wanted to make things. At one point, he contemplated Genetic Engineering, too, but architecture seemed more appealing. Architecture felt like a profession that would allow him the potential to build something and, at the same time, let him be the generalist across the board. That is why he chose to be an architect; there has been no looking back.

About their journey and career

Manit and Sonali both studied at the School of Planning and Architecture in New Delhi. Manit reflects that the school facilitated discussions beyond the classroom about sociopolitical issues and ideologies of architecture at the time, which was an enriching experience.

After SPA, they went on to study at the Architectural Association (AA), London. While the education helped them understand the various aspects of sustainable design, research, and urban housing, they noticed a severe lack of discourse around Indian architecture on a global level. This motivated them to start their practice, Morphogenesis, in 1996. The practice was envisioned to be their contribution towards putting Indian architecture on the global map.

Their education

Sonali Rastogi commenced her architecture studies at the School of Planning and Architecture (New Delhi) and the Architectural Association (London) with a graduate diploma in Housing and Urbanism under Jorge Fiori and a second graduate diploma in Graduate Design (Design Research Lab) under Jeff Kipnis.

Manit Rastogi commenced his architecture studies at the School of Planning and Architecture (New Delhi) and the Architectural Association (London) with a post-graduate diploma with distinction in Sustainable Environmental Design under Simos Yannas and an AA Diploma with Honours, under John Frazer. The influence of all three programs has formulated and influenced his thinking to date, to create sustainable architecture through the framework of an evolutionary practice inspired by nature, emphasizing passive design.

About the building

With a built-up area of 7.1 million sq. ft. occupying a 35.3-acre site, Surat Diamond Bourse consolidates India’s 67,000-strong diamond community within the world’s largest single-office building. The project exemplifies high-density office architecture and transcends global sustainability benchmarks. SDB is a seed building for the Diamond Research and Mercantile (DREAM) City, an upcoming business district, triggering unprecedented socio-economic development in the region.

Built entirely by the diamond community for the community as a cooperative, the building is a testament to their shared vision and collective agency. With a focus on sustainability, SDB consumes 50% less energy than the highest green benchmarks and features one of the world’s largest radiant cooling systems.

When will PM Modi inaugurate it?

The final date is not confirmed. Tentatively in December.

Credit Suisse risk gauge at record high, shares hit new low

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Credit Suisse Group AG’s gauge of credit risk rose to a record high while its stock hit a fresh low, adding to the turmoil after the bank’s attempts to reassure markets on its financial stability backfired. The five-year credit default swaps price of about 293 basis points is up from about 55 basis points at the start of the year and at the highest ever, according to ICE Data Services. At the same time, the shares dropped as much as 12% in Zurich on Monday and have lost about 60% just this year alone, on track for the biggest annual drop in Credit Suisse’s history.

Chief Executive Officer Ulrich Koerner had sought to calm employees and the markets over the weekend only to see his carefully-worded memo have the opposite effect. While touting the bank’s capital levels and liquidity, he acknowledged that the firm was facing a “critical moment” as it worked towards its latest overhaul. He also told employees that he will be sending them a regular update until the firm announces the new strategic plan on Oct. 27. At the same time, Credit Suisse again sent around talking points to executives dealing with clients who brought up the credit default swaps, according to people with knowledge of the matter.

Some prominent figures took to Twitter over the weekend to dismiss some of the rumors prompted by the widened CDS spread as “scaremongering.” Saba Capital Management’s Boaz Weinstein tweeted “take a deep breath” and compared the situation to when Morgan Stanley’s CDS was twice as wide in 2011 and 2012. Koerner, named CEO in late July, has had to deal with market speculation, banker exits and capital doubts as he seeks to set a path forward. The lender is currently finalizing plans that will likely see sweeping changes to its investment bank and may include cutting thousands of jobs over a number of years, Bloomberg has reported.

Koerner’s memo was the second straight Friday missive as speculation over the beleaguered bank’s future increases. Analysts at KBW estimated that the firm may need to raise 4 billion Swiss francs ($4 billion) of capital even after selling some assets to fund any restructuring, growth efforts and any unknowns. Credit Suisse’s market capitalization has dropped to around 9.5 billion Swiss francs, meaning any share sale would be highly dilutive to longtime holders. The market value was above 30 billion francs as recently as March 2021.

Bank executives have noted that the firm’s 13.5% CET1 capital ratio at June 30 was in the middle of the planned range of 13% to 14% for 2022. The firm’s 2021 annual report said that its international regulatory minimum ratio was 8%, while Swiss authorities required a higher level of about 10%. The KBW analysts were the latest to draw comparisons to the crisis of confidence that shook Deutsche Bank AG six years ago. Then, the German lender was facing broad questions about its strategy as well as near-term concerns about the cost of a settlement to end a US probe related to mortgage-backed securities.

Deutsche Bank saw its credit-default swaps climb, its debt rating downgraded and some clients step back from working with it. The stress eased over several months as the German firm settled for a lower figure than many feared, raised about 8 billion euros ($7.8 billion) of new capital and announced a strategy revamp. Still, what the bank called a “vicious circle” of declining revenue and rising funding costs took years to reverse. There are differences between the two situations. Credit Suisse doesn’t face any one issue on the scale of Deutsche Bank’s $7.2 billion settlement, and its key capital ratio of 13.5% is higher than the 10.8% that the German firm had six years ago.

The stress Deutsche Bank faced in 2016 resulted in the unusual dynamic where the cost of insuring against losses on the lender’s debt for one year surpassed that of protection for five years. Credit Suisse’s one-year swaps are still significantly cheaper than five-year ones.

Credit Suisse Group CDS Widens 42 Bps: 12 Signals Since Sept. 16

Last week, Credit Suisse said it’s working on possible asset and business sales as part of its strategic plan which will be unveiled at the end of October. The bank is exploring deals to sell its securitized products trading unit, is weighing the sale of its Latin American wealth management operations excluding Brazil, and is considering reviving the First Boston brand name, Bloomberg has reported.