Combat Volatility like a pro with Mahindra Manulife Arbitration Yojana mutual fund

Who would have thought that a majority of Indian PSU banks would be trading below Rs 50? Who would have predicted that Pharma shares would be touching sky high within a few months? There were only a few market gurus who could predict the unprecedented move of RIL in just 50 days. Analysing our sensitive stock market in tough especially in the unprecedented & unseen times like these. But investing must not stop as Ups & Downs are a part of our lives as well as markets.

Market analysts rely on INDIAVIX index during such strange times. Basically its an index which charts the future trajectory of the market cycle. When the lockdown was announced, the INDIAVIX index jumped from 10 to 80 within a fortnight. As they say, only 5% of investors make the most of such occurrences and the rest 95% end up losing their hard earned money. The damage was such that most investors even today think twice before averaging their pre-covid investments. People who traded each minute, each day during the market hour were afraid to check their trading portals.

It’s funny when they say, “When the bulls climb they take the stairs & when the bears fall they jump through the window”. The general perception was so skewed that when the market media cried a No Buy on a certain stocks and funds there were investors who took a leap of faith & made it big!

Are you aware that there is a mutual fund which can make money on both rise and fall of the market cycle? Mahindra Manulife Arbitrage Yojana is an open ended scheme for investment in arbitrage opportunities available in equity, derivatives, debt and invIT markets. Arbitrage Mutual Funds are moderately low risk investment that can generate you an income through arbitrage opportunities in cash and derivative segment. Volatility gives an investor more opportunity in cash & futures/options market. Arbitrage Mutual Funds though they invest in equity are generally considered as safe investment pick and investors making loss in this kind of investment is yet unheard of.

Depending the upon the market conditions, Mahindra Manulife Arbitrage Yojana can hedge the risk by switching between Debt & Equity investment. At times a stock is available at different prices in two exchanges. For instance, stock A is trading at Rs 1000 on NSE & Rs 950 on BSE at the same time, then the spread of Rs 50 between both exchanges acts as your profit.

Another strategy that is often used by fund managers is cash & carry arbitrage. For example, buy stock B at Rs 1000 in spot market and sell the same contract of stock B in futures market at Rs 1020 with a lock-in profit of Rs 20. It is one of the least volatile hybrid schemes that is suitable for investment across market cycles.

What differentiates Mahindra Manulife Arbitration Yojana from other liquid funds is that when you exit the fund, the credit is reflected in your account the very next day. Being an equity based fund hybrid arbitrage mutual fund, the market position gets closed immediately giving investors an instant margin facility. The scheme offers better tax efficiency on returns compared to other short-term debt funds. Also, there’s no exit load after the period of 30 days.

It’s a win-win-win situation wherever the market heads. Mahindra Manulife Arbitration Yojana is best suited for investors who are looking out for Short Term investment parking pool with investment period varied from 1 month to 6 months.

The NFO opens for subscription on August 12 and closes on August 19. The scheme will reopen for continuous sale and repurchase from August 25.

Investors can invest online in the scheme from here.

Mahindra Manulife Arbitration Yojana MF scheme details

Fund House: Mahindra Manulife Mutual Fund

Issue opens: 12 August 2020

Issue close: 19 August 2020

MF category: Hybrid

Type: Open ended

Minimum Investment: Rs 1,000

Exit Load: Nil, after 30 days.

Plans: Growth, Dividend

Benchmark: Nifty 50 Arbitrage Index TRI

Riskometer: Moderately Low

Fund Managers: Srinivasan Ramamurthy & Rahul Pal

Disclaimer: Investment subject to market risk. Please consult your financial advisor before investing.

Aditya Birla Finance becomes first company to list Commercial Papers on National Stock Exchange.

Aditya Birla Finance Limited, the lending subsidiary of Aditya Birla Capital Limited became the first company to list its Commercial Papers on NSE. National Stock Exchange, India’s leading stock exchange has started listing Commercial papers (CPs) which will help issuers make appropriate disclosures at the time of listing and on a continuous basis and will lead to deepening of the debt markets.

Listing of CPs is expected to lead to efficient transmission of information regarding corporate borrowings and liquidity positions to market participants. It will also contribute effectively towards development of the commercial paper market and is expected to have a positive effect on the Debt Capital market in India.

Aditya Birla Finance Limited (ABFL) listed its Commercial Paper on NSE with value date of 28th November 2019 and maturity date on February 7, 2020. ABFL is a well-diversified non-banking finance company (NBFC) with a long-term credit rating of AAA (Stable) from both ICRA as well as India Ratings.

Marking the occasion, Ms. Ishita Vora, Head Listing, NSE Ishita Vora, Head Listing, NSE Ishita Vora, Head Listing, NSE said, “NSE is committed to the development of the Commercial Paper market in India and has been at the forefront to enable the smoother transition of CPs as listed securities. We are hopeful that this will enhance transparency and enable efficient information dissemination to investors leading to deepening of investments in money market instruments.”

Mr. Rakesh Singh, MD & CEO Aditya Birla Finance Limited said, “SEBI’s announcement cited to list Commercial Papers is a welcome move for the industry as it will encourage further transparency and better corporate governance practices. We are glad to announce that ABFL is taking a thought leadership position in the market by being the first company to list its Commercial Paper in order to reinstate faith in the system. Trust in the system can only be restored with complete transparency. Through this pioneering move, we aim to set standards for Commercial Paper issuance which will bring in liquidity, transparency and thereby create trust in the minds of investors. We always strive to set a benchmark in whatever we do.”

Source - Press Release.

France's Total acquires 37.4% stake in Adani Gas to supply and market Natural Gas in India.

With this announcement of Total’s Acquisition of 37.4% Stake in Adani Gas, Adani and Total join to create one of India’s largest Downstream Energy Partnerships.

As part of its strategy to develop new gas markets, Total, the world's second-largest LNG player, expands its partnership with the Adani Group; the largest energy and infrastructure conglomerate in India, to contribute to the development of the Indian natural gas market.

The Indian natural gas market represents a substantial growth perspective. It is currently only 7% of the energy consumption but has grown over the last 3 years by more than 5% per annum, supported by an active policy of the Indian Government that aims to diversify its energy mix and develop domestic use of gas in cities and as fuel for vehicles. India has set the ambitious target of increasing the share of natural gas in its energy mix to 15% by 2030.

The partnership between Adani (50%) and Total (50%) includes several assets across the gas value chain notably two imports and regasification LNG terminals: Dhamra in East India and potentially Mundra in the West, as well as Adani Gas Limited, one of the 4 main distributors of city gas in India of which Adani holds 74.8% and of which Total will acquire 37.4%.

Adani Gas shall also pursue fuel retail business in India and target to setup 1,500 fuel stations offering top of the line products in the coming years.

Adani Gas Limited aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5% of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6 million homes as well as through 1,500 CNG retail outlets across 71 districts, 68 towns across 15 states in India.

Speaking on the occasion, Adani Group Chairman, Mr. Gautam Adani, said, “Adani is delighted to deepen its strategic partnership with Total, a global energy major, to one of the largest downstream gas partnerships in India. Total’s investment in Adani Gas reinforces India’s natural gas and demand potential. The partnership will derive significant synergies between Adani’s capabilities of developing world-class assets and Total’s global best practices as well as leveraging business synergies across LNG, Fuel Retail and City Gas distribution. We look forward to working together towards delivering India’s vision for clean and green energy”

As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh.

“Energy needs in India are immense and the Indian energy mix is key to the climate change challenge. Firmly investing to develop the use of natural gas in India is in line with Total’s ambition to become the responsible energy major. The natural gas market in India will have strong growth and is an attractive outlet for the world's second-largest LNG player that Total has become. Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors. This partnership with Adani is the cornerstone to our development strategy in this country.”, said Patrick Pouyanné, Chairman and CEO of Total.

Disclaimer: Shareholder of Adani Gas.

Indiabulls Shubh trading app offers ‘Truly Unlimited Plans’ for new-age investors.

India’s economy and its bustling stock market have witnessed a phenomenal rise in the last decade. Such has been the success that many few would believe that BSE Sensex was trading below 10,000 points just 9 years back. With reforms at the fore-front agenda, World Bank predicts that India’s economy is set to reach $5 trillion by 2025. Most leading brokerage houses have a bullish outlook on Sensex and Nifty especially after the recent historic announcements on corporate tax by FM Sitharaman. We all will unanimously agree that stock market investments, be it equity or commodity, are one of the only few investment avenues which have the potential to beat ever-rising inflation.

The times they are a changin’! From floor-based trading to branch-based services and now trading on-the-go with smartphones. A data released by National Stock Exchange states mobile trading share has more than tripled to 10.7% as on August 2019 from 3.3% in April 2016. Catching the bandwagon, Indiabulls has launched Shubh – a mobile trading platform with subscription based plans for seamless trading experience. Indiabulls Ventures Limited is one of the earliest capital market company providing securities and derivative broking services.

Karo Shubh Se Shuruat!

Shubh trading app is the newest offering from Indiabulls Ventures Limited. The discount broking platform is India’s first truly unlimited trading platform with 'Subscription based' monthly pricing options. Shubh gives the customers a choice of monthly plans that suit their broking needs starting at ₹ 1000 where they can enjoy the benefit of 0*% brokerage on both Intraday and Delivery. No need to panic on the asterisk (*) symbol, as Shubh charges maximum ₹ 0.01 brokerage per order as per SEBI rules.

Indiabulls Shubh is basically the ‘Netflix of Trading’. Once the investor is on-board and subscribed, the platform offers a transparent trading experience like never before at fixed rates. Many may not know this, but the volume of ‘Buy Today and Sell Today Tomorrow’ trades is such that several investors end up paying brokerage value amounting in thousands in just single trading day. By renewing subscription plan every month, investors can protect their capital from hefty brokerages and trade as much they want.

On plans onwards ₹ 2000 per month, Shubh trading app offers an attractive margin trading facility from ₹ 1 lakh to ₹ 50 lakh at 0% interest rate. Indiabulls Shubh is perfectly placed for new-age investors who trade in equity (NSE & BSE), futures & options (NSE F&O) and currency segments. The intraday exposure offered by Shubh is upto 4x in F&O, 5x in equity, and 4x for margin trading. As an introductory offer, the company has announced free trading for the first 30 days with no subscription charges for new customers. The one time account opening charges of Shubh is just ₹ 500 inclusive GST. Existing 7.1 lakh Indiabulls clients can also enjoy the benefits of the new plan by upgrading their current one.

Trading Made Easy

Indiabulls Shubh trading app is available on both Android and iOS platform. For the ease of trading, investors can execute trades at a lightning fast speed on app, web and on desktop. If in a hurry, no worry! Users can even place trading orders on the phone at no additional charges. The Shubh app is built on the philosophy of speed, stability and simplicity.

With an enormous amount of data and continuous transactions, traders often complain of mobile app downtimes. This is unique to sentimental capital markets like India. Be it budget, government policy, US fed, or China- US trade war, the downtime of trading apps is a major issue where traders may potentially lose their hard-earned money. Unlike some newbies in the business, Indiabulls leverages its market experience of the past 20 years to offer seamless trading experience even during major events.

“Shubh’s subscription plans have been designed keeping in mind the needs of today’s new-age traders. We have built a clean, vanilla type of product where customers can trade through app, web, and even through calls with ease. We invite traders to experience our all new Shubh platform” - Divyesh Shah, CEO, Indiabulls Ventures Limited.

The Indiabulls Shubh app and web platforms offer an entirely online process for opening a Demat Account. Open the app, fill out the e-KYC details with e-signature Et Voila! Traders can further subscribe to monthly plans as per their needs.

Download the Indiabulls Shubh app from Play Store and Apple App Store and try it yourself!

BSE launches 'BSE stAR MF' Android app for its mutual fund platform

BSE StAR MF, India's largest Mutual Funds Distributor platform, launched its mobile app - ‘BSE StAR MF’ at BSE International Convention Hall, Mumbai. The newly-launched app would look at enabling more participation from Mutual Fund Distributors (MFDs) by helping them process transactions on the go! The app would further ease the process of purchase and redemption of mutual fund units on behalf of their clients.

BSE StAR MF Mobile app supports real-time client registration and paperless transactions, creates and uploads mandate for SIPs, generates the basket of multiple of orders, tracks and allows the distributor to analyse his business at his fingertips.

In April 2019, the platform processed 42.6 lakh transactions. In FY2018-19, BSE StAR MF crossed 3.5 crore transactions witnessing 111% growth as compared to 1.70 crore transactions in FY2017-18.

Commenting on the launch of BSE StAR MF app, BSE MD & CEO, Ashishkumar Chauhan said, “BSE StAR MF platform has become a benchmark for the fintech industry in India by e-enabling more than 24,000 direct IFAs and 200,000 indirect IFAs to automate end to end processes in their front and back offices. The launch of the app would further provide the comfort of doing business to our 24,000 members. This app would not only increase their productivity, but would also enable IFAs to take their business anywhere, anytime. BSE StAR MF has seen more than 100% year on year growth every year for the last 10 years consistently. With the launch of the app, we look forward to help IFAs grow their business and retain the No. 1 position in the online MF distribution platform segment. This mobile application will also be provided to individual investors shortly.”

Overall, the superior support system and distribution reach of BSE StAR MF has enabled the platform to grow exponentially with the registered distributors soon to touch 24,000 in India. The launch of the StAR MF app is expected to further increase the number of distributors significantly. In the future, the app aims to support online video KYC to onboard new investors.  The BSE StAR MF app can be downloaded from the Google Play Store. Once the app is downloaded, the sign up can be done by providing the member identification number.

Source: Press Release.

Piramal and CPPIB to launch India's maiden Renewable Energy focused InvIT.

CPPIB has committed $360 million while Piramal will provide $90 million

Piramal Enterprises Limited (“PEL”) has signed a Memorandum of Understanding with Canada Pension Plan Investment Board (“CPPIB”), a Canadian pension fund, to co-sponsor a renewable energy-focused Infrastructure Investment Trust (“InvIT”). With an initial corpus of US$ 600 million, and the option to scale further, the InvIT would seek to acquire up to 1.5-2GW of stable and cash generating renewables assets on a hold-to-maturity basis, with a firm focus on diversification of both asset type as well as off-taker profile.

"Piramal is pleased to partner with CPPIB on the launch of the first ever InvIT in India, focused on renewables. The foundation of this partnership is based on a shared ethos and values that leverage CPPIB’s global track record of value creation in the infrastructure space with PEL’s long term strategy and goodwill in India. We are enthusiastic about the opportunity as it is truly scalable and continue to remain committed to creating value for our shareholders." - Ajay Piramal, Chairman, Piramal Group.

Mumbai based Piramal Enterprises Limited (PEL) is one of India’s large diversified companies, with a presence in Financial Services, Pharmaceuticals and Healthcare Insights & Analytics with a consolidated revenue of over US$1.9 billion in FY2019, with ~40% of revenues generated from outside India.

Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo, and Sydney, Canada Pension Plan Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. In mid-2018, CPPIB announced that it would foray in Green Bonds.

Both PEL and CPPIB will act as Co-Sponsors of the proposed InvIT and hold up to 75% of the units (with CPPIB committing US$360m and holding up to 60%; PEL committing US$90m and holding 15% ) and seek to raise capital from other like-minded investors for the remaining 25%. In the interim and prior to its launch, PEL and CPPIB will jointly warehouse seed assets for the proposed InvIT. PEL would act as the sole Investment Manager as well as Project Manager for the proposed InvIT.

The renewable energy sector is at an inflection point and is witnessing significant consolidation, the pace of which is likely to increase in the near future.  The timing of the issue is therefore opportune for aggregating assets in this sector given that the existing players are willing sellers in light of a constrained capital market environment - both debt and equity. This is the first truly neutral ‘white-label’ InvIT – led by a fiduciary and supported by patient capital with a strong record of corporate governance. Renewable InvITs can serve as a strong catalyst for the Green Energy sector as a whole.

ICICI Bank: Hard Lined Corporate governance yields positive results in third quarter.

There is increasing awareness among Indian investors to invest in companies that follow practices of good corporate governance. And so, the fact that leading private sector bank like ICICI Bank had the fortitude to appoint someone of Justice Srikrishna’s stature to given an unbiased decision speaks volumes about the credibility of its Board.

ICICI Bank Board took a bold decision not only to dismiss her but also clawback of all her bonuses paid from April 2009 until March 2018 - a first in Corporate India and the Bank is showing the way to other boards/corporate Inc. The ICICI Bank has shown great composure following results of the Srikrishna panel and is once again taking the lead in setting a fine example for good corporate governance and safeguarding its investors. Perhaps, Investors have held on the right reasons and their faith has paid dividends considering the positive outcome of the Q3 results.

Some of the highlights from ICICI Bank’s third quarter results are that its Net interest income has increased by 21% year-on-year and its core operating profit has grown by 14% year-on-year to ₹ 5,667 crore. With a banking network of 4867 branches, Current Account and Saving Account (CASA) deposits increased by 15% year-on-year to ₹ 2,99,374 crores. In addition to this, retail loans have grown by 22% year-on-year and the Bank's total income rose to ₹ 20,163.25 crore over the third quarter as compared to ₹ 16,832.22 crore in the same period a year ago, ICICI Bank said in a statement.

Future forecast for ICICI Bank also looks bright according to multinational financial services company Morgan Stanley that sees ongoing improvement in ICICI Bank’s asset quality trends over the next few quarters and expects stronger performance from the bank’s stock in 2019.

Looks like the ICICI Bank has moved on and whatever has happened is good for the shareholders as it has bought renewed optimism within the institution.

43% surge in Mutual Fund investments for Q1 2018-19 says AMFI.

Bombay Stock Exchange

There has been a historic rise in investments in Mutual Funds according to the data released by Association of Mutual Funds of India. According to the financial market expert, the surge in MF investments can be attributed to the strong performance of Indian market, low paying Fixed Deposit interest rates and the rising awareness among small investors through campaigns like 'Mutual Fund Sahi Hain'.

Investors have pumped Rs 1.4 lakh crore into mutual fund (MF) schemes in April-June quarter this fiscal, a surge of 43 per cent from the year-ago period, driven by strong participation from retail investors. 

According to Association of Mutual Funds of India (Amfi) data, the inflow has also helped in pushing the assets base of the 42-player MF industry to Rs 23.40 lakh crore at the end of June this year, an increase of 20 per cent from Rs 20.40 lakh crore in June-end 2017.

According to the data, investors poured in a net of Rs 1,33,903 crore in MF schemes in the first quarter of the ongoing fiscal, as compared to Rs 93,400 crore in the April-June period of 2017-18. The latest inflow has been mainly driven by contributions from liquid funds and equity schemes. Individually, liquid funds or money market category -- investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon -- witnessed an inflow of Rs 1.22 lakh crore. Besides, equity schemes attracted close to Rs 33,000 crore.

The rise in the Mutual Fund market despite the volatility and weaker Rupee suggests that investors are looking for long-term horizon view. The trend is expected to rise further as investors are starting to acknowledge the long-term wealth-creation potential of equities.

Source - IBEF.

#MarketWatch: What next for Manpasand Beverages?

Over the last few weeks, the Indian stock market has been hit with several shocks. The large caps were affected by rising crude and currency prices. The tumble in the small cap and mid-cap were led by the investor confusion in few selective stocks like Vakrangee, Inox Wind and Manpasand Beverages. Manpasand Beverages through its corporate disclosure declared the announcement of resignation of its statutory auditors M/S Deloitte Haskin & Sells, Vadodara. On the subsequent day, the Board of Directors of Manpasand Beverages appointed M/s Mehra Goel and Co., as their statutory auditor for the year. The newly appointed accounting firm has 13 partners on-board with an operational experience of sixty five years.

Although, there have been many cases of resigning auditors in the recent past. Several misinformed presumptions were disseminated through mainstream and social media which affected investor sentiments at large. Most of them are unsubstantiated rumours that are not based on any factual evidence and a lot of shareholders and investors have been negatively impacted. In fact, according to Prime Database, between January and May 2018, 32 auditors have resigned midterm, while for 2017-18 the number of exits stood at 36. 

Investors should be aware that Deloitte was auditing the financial results of Manpasand Beverages for the last 8 years and had never expressed their concerns on the financial performance of the company. Further, there has been no instance till date where the company has denied disclosure of any financial information. This rumour ride has affected the stocks of the company. Although the investors should prefer official sources of information than media agencies for further investment opportunities.

Manpasand Beverages has been one of the fastest growing listed FMCG companies. The company reported staggering 43.8% rise in net profit of Rs 72.6 crores for the financial year end of 2017. The total income for the same year stood at Rs. 735 crores. For Q3 2017-18, India’s leading fruit drink player, Manpasand Beverages, reported a growth of 64% rise in net profit at Rs 11.9 crores against net profit of Rs 7.2 on Year on Year. 

A 2016 report by Mintel on the global juice market indicates that in India too, packaged juice is likely to grow by taking a share from fresh-squeezed juice and moving into small cities and more rural areas, similar to what is observed globally.

“In India, for example, local fruit juice manufacturer Manpasand Beverages found success focusing on semi-urban and rural markets, where growth is fuelled by rising disposable incomes and a void left by bigger brands that have largely stuck to urban centers,” the Mintel report states. 

Manpasand's healthy market position in the fruit drink segment is underpinned by presence of brand Mango Sip and Fruits Up. The company has made several innovations in the past couple of years, which have enabled it to enter in top 5 players in the mango-based drinks market. In fiscal 2014, it launched the Fruits up brand in the carbonated drink market. The brand grew 71.30% over the past three fiscals and contributed 25% to the company's revenue in fiscal 2017. With network of 4000 distributors across the country and strong presence in Western and northern parts of India, revenue increased significantly over five fiscal through 2017.

The company already has 5 manufacturing units spread in Vadodara, Varanasi and Ambala. Manpasand Beverages plans capex of Rs 600 crores to increase manufacturing capacity with plants at Sri City, Vadodara, Varanasi, and in Khurda, Odisha. The ground-breaking ceremony of upcoming Khurda plant was commenced in the august presence of CM of Odisha, Shri Naveen Patnaik. These four new plants are sure to double the company’s production capacity in the coming months. This shall also help the brand to reach newer markets as the production facilities increase. Manpasand Beverages also plans to enter into new beverage verticals in near future.

What market investors want? Stable outlook, prospective growth and a laborious past for a glorious future. Manpasand Beverages Limited was set up as a proprietorship firm named Manpasand Agro Foods in 1996 in Vadodara, and was reconstituted as a private limited company in fiscal year 2012 and public limited company in fiscal year 2014. Since then it has been expanding its market portfolio. 

Manpasand’s flagship brand, Mango Sip is growing by leaps and bounds and is expected to grow at a CAGR of 33.1% to Rs 1,408 crore by FY20. The recent backlash against carbonated cola drinks especially in the south and the upcoming Sricity facility will help Manpasand acquire southern markets. The Indian Juice market is expected to register compounded annual growth rates (CAGR) of 8% by 2022 to cross Rs. 17,500 crore compared to around Rs. 12,040 crore at present, according to Euromonitor International. The report states that the regional players and start-ups are currently challenging present market leaders by introducing new healthy lines of juices. Over the forecast period, these companies are expected to increase their production capacity and distribution networks to ensure year-round availability, which is likely to affect the current competitive landscape of juice in India.

The Euromonitor International report states that Coca Cola, Parle Agro, PepsiCo and Dabur together account for the vast bulk of juice sales primarily due to their successful portfolios of mango-based drinks. However, companies like Manpasand Beverages and Hector Beverages are quickly gaining market share since the last couple of years. Also, a Motilal Oswal report published in May 2018 suggested that Manpasand Beverages Limited shall see continuous growth in the coming years and would positively impact in its stock value.

Much of the ambiguity around Manpasand Beverages was to do with the fact that the company had not shared a schedule for its Meeting of the Board of Directors of the Company. However, now that the company has informed the bourses that it would convene a board meeting on June 27 to consider and approve audited financial results for Q4 FY2017-18. Soon, after this corporate announcement, the shares of Manpasand Beverages saw an upward trend since the third week of June; further validating the growing positivity about this company in the investor community.

Disclaimer – We have provided all information based on our research and we do not have any holding. Please consult your financial advisor before making any investment decision.

- Chaitanya Kulkarni.

Edelweiss Mobile Trader app – Your personal wealth advisory.

India’s economy and her bustling stock markets had a phenomenal rise in the last decade. Such is its success that very few would believe that BSE Sensex was trading below 10,000 points just 8 years back. With a reform-based approach, Indian stock markets have improved their index by three-folds. As per the World Bank report, India’s economy is expected to double to $5 trillion by 2025. Most market experts firmly believe that BSE will touch the historic 1,00,000 index points before 2025. It is impossible to miss out on this golden opportunity. Stock market investment, be it equity or mutual funds, are one of the very few investment avenues which can beat real inflation.

The times they are a changin’! From floor trading to desktop and now in a mobile app. Mobile-based trading apps are the choice of today as they are highly efficient. You can manage the products or assets at any time with easy to operational and navigational tools. If you are so serious about stock trading, then it is must for you to keep every piece of information at your fingertips. Yes, nothing else than a mobile app can do this for you. Timely information means greater margin.

With an enormous amount of data and continuous transactions, traders often complain of mobile app downtimes. This is a unique problem of sentimental markets like India. Be it budget, government policy, US fed, SGX Nifty or Trump’s China trade feud, the downtime of trading apps is a major issue where traders may potentially lose hard-earned money. Users on Google Play Store have commended the Edelweiss Mobile Trader (EMT) app for smooth functioning during national and global events. The EMT app is built on the philosophy of speed, stability and simplicity.

Market mein kya chal raha hain?

The Edelweiss mobile trader app offers OTP based login for quick, simple and secure trade. The application is free for all. Users can check quotes from BSE and NSE from the main landing page itself. Users can track and trade across Equity, Equity Derivatives, Commodity, Currency Derivatives, NCDs, Bonds, Debt and e-SIP across NSE, BSE, MCX and NCDEX, all in one place. This is not something you can find being offered by all brokerages, all in one place. Market experts can predict early trends with movements in SGX Nifty of Singapore. Edelweiss Mobile Trader app is an early pioneer to bring SGX Nifty index feature. Drag the bull down when you wake up and you can the sense of movements in Indian markets later in the day.

An investment in knowledge pays the best interest. When it comes to investing, nothing will pay off more than educating yourself. - Benjamin Franklin.

Research is at the core of investing. Important information like live indexes, currency exchange rates, market commentary, sector performances, IPOs, FII DII flow, volume buzzer are easy to find in the EMT app. The left-hand side of the app is dedicated for research and the right-hand side involves trading. Trading advisories and Buy & Sell calls on a short term to long term horizon help in investment decisions. The research calls are thoroughly studied by the team of research analysts at Edelweiss.

Buy low and sell high. The super trend feature in technical studies allows to you to study the historical data of the selected scrip in detail for last 15 years. Along with updates on important events like bonus, splits or dividends, traders can buy when the super trend line indicates green and sell when its red. Prediction analysis and technology truly reflects in Ease of Doing Trading. The Edelweiss Mobile Trader app is one of the finest and advance charting tool on Smart Phone provided by anyone in the country.

Edelweiss Mobile Trader app tops the chart on both Google PlayStore and iOS App Store. With over 3 million minutes of app usage every day, the EMT app has a rating of 4.4 and 4.3 out of 5 on Android and iOS stores respectively. Each query raised on play store or social media by users is reviewed on daily basis. The Edelweiss Mobile Trader app has been awarded for ‘Best use of Mobile Technology in Financial Services’ by ET NOW BFSI Awards & best ‘Consumer Mobile Service’ by BBC Knowledge.

Download the #BestTradingApp from Play Store and iOS app store and try it yourself.

- Chaitanya Kulkarni.

IRFC lists green bonds at India INX Exchange

India INX Exchange is BSE’s international exchange at GIFT City, Gujarat.

The BSE’s India International Exchange has listed Indian Railway Finance Corporation’s green bonds on its debt listing platforms at GIFT City. Gujarat International Finance City near Gandhinagar is India’s first financial SEZ and smart city. India INX exchange at GIFT has a daily turnover of Rs. 1400 crores. IRFC, the financial arm of Indian Railways recently raised $500 million from 10 year green bonds at London Stock Exchange. IRFC green bonds have become the first debt security to be listed on GIFT IFSC.

Listing the bond on India INX at an event organised by the BSE in Mumbai, Railway Minister Piyush Goyal said "India is the fastest-growing economy in the world and our need to raise funds is a continuous process. To have a platform to tap global investors by issuing bonds in any currency is the first of its kind in India and India INX as India’s first international exchange at IFSC Gift city, Gandhinagar has yet again been a pioneer in this.”

"In a country like ours, this will make global investors and funds more accessible to Indian and foreign issuers at a fraction of cost that is being incurred today by issuers," he added.

The bonds have an annual yield of 3.835 per cent.

"We are excited to be the first issuer to list on BSE's India International Exchange. Such a listing platform from India INX will now help us to tap global investors from India going forward," IRFC chairman B N Mohapatra said.

India INX's Global Securities Market (GSM) segment, India's first debt listing platform, allows raising funds in any currency of choice by both foreign and Indian issuers from investors across the globe.

Source – GIFT City Press Release

Demonetisation drives India’s AUM industry growth

Demonetization can be largely associated with the transition of monetary assets. Exchanging the illegal tender with the legal one. Be it the transition from barter to bronze coins or from cash king to less cash society.  Demonetization in India was largely a hit on pirates’ buried treasure – the Black Money. This was a part of the long-term war on cash that the country has waged. Cash is just a tender issued by central banks and it cannot act as a commodity. Black money holders consider cash as a revenue stream generated from illegal activities or activities which go beyond legal framework. In a rich country like India with poorer citizens, demonetization is a human issue as it also questions the earnings of the low wager and their saving abilities.

One thing demonetisation announced by PM Modi has achieved in large. The citizens of this country started to show interests in financial reconsolidation, few even talking the language of financial experts and economists. Political opponents without studying data did their best to attack the demonetisation decision. It can be debated whether the implementation could have been better also taking into the account of secrecy to be maintained. Now that, most of the notes are back into the formal system, the responsibility to act is now with Income Tax department.

The sudden ban on high value propelled people to invest in formal investments channels like banks, mutual funds and bond markets. Investments in gold and real estate became unreliable. Typically, the Indian households are major savers in the economy contributing 70 to 80 % of the gross domestic saving. These include physical assets namely real estate/gold etc. –constitute a major portion and the financial assets are mainly cash/bank deposits/ etc. Interestingly the recent data show that data from the Reserve Bank of India (RBI) shows that gross financial savings rose to 11.8% of the gross national disposable income (GNDI) in the fiscal year 2017, a notable climb of 90 basis points from 10.9% in the previous year.

Indians invested 1.2% of their disposable income into shares and bonds, a massive improvement from the average 0.2% in the years before. A look at how stock indices have soared since demonetisation should be enough to add a sense of certainty to this. The inflows into equity mutual fund schemes are another indicator of how the stock market gained from getting a bigger slice of household savings. The economy had seen a correction by back-to-back key economic reforms like demonetisation and GST, yet the BSE Sensex touch 33,500 in November 2017. The insurance sector also benefited with 2.9% of disposable income investments.

But before we rejoice, a look at household debt is warranted. Household debt rose to 3.7% of GNDI from 3.1% which means Indians resorted to loans after being bereft of cash. Adjusted for this, net financial savings come to 8.1% of GNDI, while that into physical assets is still higher at 10.7%. ‘Mutual Funds Sahi Hain’ campaign by AMFI encouraged savings in Assets Under Management (AUM) industry by targeting low-income and middle-income groups. Reflective to this, AUM by mutual funds increased to Rs 17.5 trillion by end of March 2017 and further Rs 21.4 trillion by October 2017. Higher resource mobilisation by mutual funds after demonetisation has mainly driven by retail and high net worth individual investors. Disposable savings, low-cost stock brokers, public trust and buoyant stock markets have been key to rise in AUM investments.

India enjoys a traditional bias towards physical assets, over financial investment. As per the Credit Suisse Global Wealth Report, 2016, financial assets in India account for around 10 per cent of total wealth against 51 per cent, 53 per cent and 72 per cent in UK, Japan and the US, respectively. With GST and other reforms, the organised sector is expected to grow at a faster rate than an unorganized sector. As India enjoys high GDP growth, investments in AUMs could become a structural trend.

- Chaitanya Kulkarni

4 times oversubscribed, government raises Rs. 14,500 crores from Bharat 22 ETF

Financial geeks like us have seen CPSEs ETF been oversubscribed several times in markets before. The Bharat 22 ETF, which broke all past records of oversubscription raised Rs 14,500 crore from the anchor and non-anchor investors in mid-November. The Bharat 22 is the result of promise in Budget 2016-17 given by the Finance Minister It is the second ETF to be launched after CPSE ETF, which was launched in 2014.

The Bharat22 ETF is well diversified among 6 sectors with high-returning Ratnas of Indian corporate sector. This New Fund Offer was open until November 17, 2017. The Units of the Scheme will be allotted 25% to each category of investors. In this ETF, the Retirement Fund has been made a separate category of Investors. In case of spill-over, an additional portion will be allocated giving preference to retail and retirement funds. There is a 3% discount across the board.

The strength of this ETF lies in the specially created Index S&P BSE BHARAT-22 INDEX. This Index is a unique blend of shares of key CPSEs, Public Sector Banks (PSBs) and also the Government-owned shares in blue-chip private companies like Larsen & Tubro (L&T), Axis Bank and ITC. The shares of the Government companies represent 6 core sectors of the economy - Finance, Industry, Energy, Utilities, Fast Moving Consumer Goods (FMCG) and Basic Materials. This combination makes the Index broad-based and diversified. The Sector and Stock exposure limits help in risk management and reduction of concentration, providing stability to the Index. The strength of the Index has been demonstrated in its performance from the time of its launch in August 2017 wherein it has out-performed the NIFTY-50 and Sensex.

The Index constituents include leading Maharatanas and Navratanas such as Coal India, GAIL, Power Grid Corporation of India Ltd. (PGCIL), National Thermal Power Corporation (NTPC), Indian Oil Corporation Ltd., Oil & Natural Gas Corporation (ONGC), Bharat Petroleum, and National Aluminum Company (NALCO), three Public Sector Banks such as SBI, Bank of Baroda apart from the 3 private sector companies mentioned earlier.

The government of India under the leadership of PM Modi have undertaken key economic reforms like demonetisation, GST implementation, infrastructure spending, bank recapitalisation. The recent dip in GDP was a cause of policy implementations, not policy paralysis. Moody upgraded India’s rating from positive to stable after 13 years. The stock market has not seen correction and it continues to close on a new-highs. Analysts see an oversubscription of Bharat 22 ETF as a sign of investor optimism.

“We have decided to retain ₹14,500 crore of the total subscription that has come in for Bharat-22 ETF,” Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said. The ETF saw bids of nearly ₹32,000 crores coming in, with FIIs bidding for one-third of the money. The portion reserved for retail investors was subscribed 1.45 times; retirement funds —1.50 times and NIIs and QIBs — 7 times. With this, the Centre has raised ₹52,500 crores through disinvestment in the current fiscal.

- Chaitanya Kulkarni

Source-PIB.

Morgan Stanley on India: Bullish or Foolish?

Equity and Mutual fund investments are subject to market risks. The fact that investment banks and Asset Management Companies fail to tell you. They want to portray the picture of Sensex as ‘Evergreen Market’ so that you could not miss out investing on ‘The India Story’. On a long-term, investments in India’s stock are strictly a no-miss. But that doesn’t mean that market would not see a downward trend. India needs to upgrade its economy, we still suck at Ease of Doing Business. A recent report by World Economic Forum suggests that India ranks 40^th on Competitive Market Index.

As predicted by political experts, Modi wave is likely to clean sweep in 2019 elections. In three years, the opposition has yet not managed to gain popularity even after a controversial decision like demonetisation and issues in GST implementation. With a mandate, Modi may have the power to deal with a more controversial decision like Uniform Civil Code, Article 370, Demonetisation of Rs. 2000 & Rs.500 or even topics like Reservation which have the potential to create security issues across India. India’s stock market, being the pulse of the nation, will react to these political decisions. The shift from oil guzzling vehicles to all electric is likely to create chaos in global markets. A fall in RIL, IOCL, HP, BPCL or the likes of ONGC have the power to shake BSE Sensex.

When we compare historical data, the performance of India’s stock market is fascinating. 20 years ago, BSE Sensex index for September 1997 series ended at 3902 points. The September series of 2017 ended at approx. 31,200 points. A rise of average 12% per year and much more income generated than bank fixed deposits. Numbers have the power to deceive us. Here’s how the investment bankers would say, “If you had invested Rs 1,00,000 in the stock market in 1997, today you would have a disposable income of more than Rs. 12,00,000”. But they would ignore the fact that in 1997, a sum of One Lakh rupees was really a big amount and most of the middle class would not have such huge savings.

The future, like any complex problem, has far too many variables to be predicted. Quantitative models, historical models, even psychic models have all been tried and have all failed. Mathematicians are struggling to find probabilities in the game of chess. Predicting stock markets is no joke when factors like political stability, global positions and natural disasters cannot be accounted for. The human brain is great at predictions but horrible at long-range forecasting. But, to get in news, organisations like Morgan Stanley, Karvy, Ambit etc publish exaggerated figures about the futures BSE Sensex. Let’s see how they miserably fail.

Claim 1 – Sensex may reach 50,000 by 2018.

Date of Claim – January 2013

Organisation – Morgan Stanley

Reality – With the wake of demonetisation and lacklustre implementation of GST, the GDP of India has narrowed to 5.7%. BSE Sensex currently at 31,400 points may see a correction of 1500 to 2000 points in next 6 months. GDP is expected to improve significantly with government infrastructure spending and improved digitisation. Financial experts suggest, that a turnaround in GDP is expected by Q1 2018. Although, at current scenario of markets and global slowdown, reaching 50,000 points by 2018 is far from possible.

Claim 2 – Sensex seen at 1,00,000 by 2020

Date of Claim – June 2014

Organisation – Karvy

Reality – Being humans, we all don’t have the capability to predict the future. No analyst at Karvy would have predicted the historic reforms of 2016. Although, the stock market had no negative effect on its index. Even after demonetisation, we saw a historic IPO of Avenues Supermart which gave almost double returns in just a few days. Karvy’s claim of Sensex reaching 1,00,000 has no numeric backing and is mere speculation. Looking at current levels of GDP growth and market trajectory, we may fall short with 60,000 or even more.

Claim 3 – Sensex can cross 1,00,000 mark in 10 years

Date of Claim – October 2017

Organisation – Morgan Stanley

Justification – India’s economy is expected to reach $6 trillion mark on account of JAM troika, improved digitisation and infrastructure spending. There are no doubts about India’s shining growth story. Future earnings from stock market are impossible to predict. Wall Street expert Peter Bernstein has said that our stock market excel sheets are bogus as they are based on faulty maths. Stock market earnings only earn you around 8% in counted for inflation. These so-called stock market experts have failed to predict every single stock market crash. To summarise, I would like to quote Keynes – In long term, we all are dead. It is likely to note that Yashwant Sinha and Manmohan Singh also quoted Keynes recently. Keep investing!

- Chaitanya Kulkarni