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Yatheendradas C.k.

Yatheendradas C.k.

City: Bangalore

Joining Date: 11 Jul , 2009
Last Login: 07:02 PM - 21 May , 2018
IP Address of Last Login - 122.167.235.xxx
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New Thread: You can earn Rs 5 cr in just 6 months through this

From : Yatheendradas C.k. at 07:08 PM - May 21, 2018 ( )

You can earn Rs 5 cr in just 6 months through this Narendra Modi govt scheme, here is how – Check details

Who doesn't want to be a crorepati? It may be your dream also and, thankfully, you too can become one – that too easily!

By: Rishabh Chauhan | New Delhi | Updated: May 21, 2018 5:07 PM  The Financial Express

Who doesn’t want to be a crorepati? It may be your dream also and, thankfully, you too can become one – that too easily! All you need to do is to help the Income Tax Department get hold of tax evaders and black money holders. The reward will make you rich in no time. The Central Board of Direct Tax (CBDT) recently revamped its reward scheme and enhanced the prize money to up to Rs 5 crore. In order to get this massive reward, an informant has to give specific information about a person who is a tax evader or black money holder. However, you need to remember that any false information will lead you into trouble.

Income-Tax Informants Reward Scheme 2018:

The ITI Reward Scheme 2018 was announced by the government on April 24, 2018. Under the scheme, an informant is rewarded for providing information on undisclosed income or assets and data related to tax evasion under Black Money Act, 2015 and Imposition of Tax Act, 2015.

Also, the ‘Benami Transactions Informants Reward Scheme 2018’ regulates the granting and the payment of a reward to the informer on benami properties.

A person, under the ITI reward scheme 2018, gets a reward up to Rs 5 crore for providing specific information about black money, while BTI reward scheme 2018 gives up to Rs 1 crore for the information. However, it does not mean that if the person gives information under both schemes, they will get a reward of Rs 6 crore. The reward prize cannot exceed Rs 5 crore.

Who can inform the government and how?

An informant can be a group of persons or an individual who can give accurate information to the department about tax evasion of Rs 5 crore or more, or about one or more movable or immovable benami assets worth Rs 1 crore or more. The informant needs to provide valid documents to support the allegations.

The person who has any information regarding the tax evasion or black money needs to contact the Director General of Income Tax (Intelligence). Meanwhile, for those who have information under the BTI reward scheme can approach the joint commissioner of income tax.

The informant needs to fill a form under both the schemes and submit it to the Income Tax Department along with the documents. In the form, the informer has to provide details like father’s name, address, Aadhaar, contact number along with data such as the amount of black money, parties involved, address of the assets, etc.

Karan Batra, Founder and CEO of CharteredClub.com, when asked how the scheme benefits people, said: “Incentive schemes are always beneficial as the person who is making the effort is being rewarded for the same. A lot of people have a lot of information about who, how, when & where the tax fraud is taking place and by incentivising the common man to report such information – the government can certainly increase their revenue by leaps and bounds.”

Commenting on if the initiative by the government is good, he said: “The scheme on paper looks excellent. However, what remains to be seen is how it is practically implemented. There is currently lack of awareness about this scheme. Even the people who know about the scheme are scared that what will happen if their identity gets revealed. Therefore, the government should take proper steps to spread awareness about the same and also ensure that the secrecy and anonymity of the whistleblower is not revealed.”

What is the reward process?
CBDT has set different reward slabs based on the information provided and the value of the assets. The reward will be paid in two stages – interim and final.

Types of information:

1- Undisclosed foreign income or assets liable under Black Money Act, 2015:Informant will get maximum of up to Rs 50 lakh as an interim reward. The final reward will be up to Rs 5 crore. However, the final reward will be 10 per cent of additional tax levied and realized.

2- Undisclosed income or assets liable under Income Tax Act, 2015: Interim reward would be of up to Rs 5 lakh while up to Rs 50 lakh as the final prize. In the final reward, 5 per cent of addition tax will be levied and realized.

3- Unaccounted or undisclosed cash exceeding Rs 1 crore, under Section 132 of Income Tax Act 1961: The maximum interim amount is up to Rs 15 lakh while the maximum final reward is up to Rs 1 crore with 5 per cent of additional tax levied and realized.

The interim reward will be paid within four months of relevant assessment of the information, while the final reward will be paid within six months of confiscation of the benami property.

 

New Thread: Economic boom in India coming soon?

From : Yatheendradas C.k. at 07:04 PM - May 21, 2018 ( )

Economic boom in India coming soon? Massive number of consumers eligible for credit; here’s what it means

Signalling that a major economic boom in India may be in the offing, a latest study estimates that nearly 150 million consumers who are currently not credit active are potentially eligible to become retail credit borrowers.

By: FE Online | Published: May 21, 2018 5:06 PM

Signalling that a major economic boom in India may be in the offing, a latest study estimates that nearly 150 million consumers who are currently not ‘credit active’ are potentially eligible to become retail credit borrowers. Tapping into this untapped huge potential borrower market could provide significant growth opportunities for retail lenders and provide a major boost to the Indian economy, a TransUnion CIBIL study said.

According to the report, the total population of credit-eligible consumers in India is roughly 220 million, out of which only about one-third—72 million—are currently ‘credit-active’, or have a live account with a bank or lending institution. The remaining population, a whopping 150 million are not currently credit active, but would meet the age and income requirements that would make them potentially attractive to lenders, said the report. Notably, this group includes two set of consumers, the first, who were previously credit active but are currently dormant, and second, those who have never availed a retail loan or credit card.

The retail lending market could see a major boom with the addition of these incremental growth opportunities for credit products such as credit cards, personal loans and consumer durable loans, the report noted.  

“After significant growth in retail lending over the past decade, many lenders and industry observers have asked whether the retail credit market is nearing the saturation point and could soon face a slowdown. Our study paints a much brighter picture for the industry,” Yogendra Singh, Vice President of Research and Consulting for TransUnion CIBIL said.  According to the expert, this untapped market presents an opportunity for sustained, prudent growth for lenders over the next five years and beyond. “Lenders need to find ways to reach this untapped market, which likely has credit needs that are not being met currently,” he observed.

The TransUnion CIBIL study calculated that approximately 220 million consumers meet the target age range—from 20 to 69—and minimum income level, which is assumed as at least Rs 250,000 per year, to be attractive to lenders for retail credit products. “This addressable market size is forecast to continue to grow at a rapid pace, as more consumers enter the target age range and economic growth raises income levels.

The study forecasts that the addressable market will increase by 14-16 million consumers per year, reaching an estimated 295 million by the end of 2022,” the report said. According to Singh, as more consumers reach adult age and have disposable income, they will increasingly seek credit to help finance purchases of housing, vehicles, and household goods. “As well, in an increasingly digital marketplace, they will want credit cards to help facilitate online transactions. These developments bode well for continued robust growth in the retail lending market,” continued Singh.

Apart from a robust economic boom due to potential eligible borrowers, the study finds that household debt levels in India as a percentage of national income are modest in comparison to other emerging countries such as China, Brazil and South Africa. If India follows the growth trajectories of other countries, total household debt could increase from Rs 37 trillion at the end of 2017 to between Rs 78 – 94 trillion by the end of 2022, noted the report. This supports the conclusion that Indian households will have additional borrowing capacity and could continue to finance growing consumption levels.

 

New Thread: Tariff battle: India may target US apples, almonds etc

From : Yatheendradas C.k. at 08:48 AM - May 21, 2018 ( )

Tariff battle: India may target US apples, almonds and bikes

PTI  BUSINESS LINE

NEW DELHI, MAY 20

In a retaliatory move, India has told the WTO that it proposes to raise duties by up to 100 per cent from next month on 20 products imported from the US — such as almonds, apples and specific motorcycles — if Washington does not roll back high tariffs on certain steel and aluminium items.

It may hike the duty from 5 per cent to 100 per cent. “India hereby notifies the Council for Trade in Goods of its decision to suspend concessions or other obligations ... that are substantially equivalent to the amount of trade affected by the measures imposed by the US,” said a communication by India to the WTO.

It further said the proposed suspension of concessions would be in the form of “an increase in tariffs on selected products originating in the US”. It also said that India reserves the right to further suspend substantially equivalent concessions and other obligations based on the measures taken by the US.

‘No consultations’

India had earlier urged the US to exempt it from the decision to raise import duties on certain steel and aluminium products.

The country has proposed this move under the WTO’s Agreement on Safeguards.

On March 9, US President Donald Trump signed two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imported from all countries except Canada and Mexico. The move sparked fears of a global trade war.

India has also said the US had imposed definitive safeguard measures without giving affected members any opportunity for consultations. “India wishes to clarify that suspension of concessions shall be equivalent to the amount of trade affected by the US’ measures.

To this end, India reserves the right to adjust the specific products for which suspension of concessions is effectuated, and its right to adjust the additional rate of duty imposed on such products,” it said.

New Thread: Asian stocks rally

From : Yatheendradas C.k. at 08:45 AM - May 21, 2018 ( )

May 21, 2018 08:16 AM IST | Source: Reuters

Asian stocks rally after Mnuchin says Sino-US trade war 'on hold'

Hong Kong's Hang Seng was up 1.0 percent, Taiwanese shares 1.1 percent and mainland shares 0.4 percent.

Stocks rose on Monday as US Treasury Secretary Steven Mnuchin declared the US trade war with China "on hold" following an agreement to drop their tariff threats that had roiled global markets this year.

US S&P mini futures rose 0.60 percent in Asian trade on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.55 percent in early trade, led by strong gains in greater China. Hong Kong's Hang Seng was up 1.0 percent, Taiwanese shares 1.1 percent and mainland shares 0.4 percent.

Japan's Nikkei gained 0.4 percent.

Mnuchin and US President Donald Trump's top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future.

"The weekend talk appears to have made progress. While they still need to work out details of a wider trade deal, it is positive for markets that they struck a truce," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

As safe-haven demand for debt fell, US bond prices were under pressure, keeping their yields not far from last week's peaks.

The 10-year Treasuries yield stood at 3.065 percent, near a seven-year high of 3.128 percent hit on Friday.

"Recent data suggests the US economy is very strong, hardly slowing down in Jan-Mar. The world economy slowed in that quarter but it appears to be rebounding. And recent rises in oil prices are likely to lift inflation expectations further," said Tomoaki Shishido, senior fixed income analyst at Nomura Securities.

"We expect more selling until the next Fed's meeting in June," he said.

In the currency market, higher US yields helped to strengthen the dollar against a wide range of currencies.

The euro dipped 0.1 percent to USD 1.1756, hovering above Friday's five-month low of USD 1.1750.

The common currency was also hit after two anti-establishment parties pledged to increase spending in a deal to form a new coalition government.

The dollar maintained an uptrend against the yen, rising 0.20 percent to fetch 110.97 yen,, close to Friday's four-month high of 111.085.

Oil prices held firm near 3-1/2-year highs also on easing trade tensions between the world's two biggest economies.

The market is keeping an eye on Venezuela, where President Nicolas Maduro appeared to be set for re-election, an outcome that could trigger additional sanctions from the United States and more censure from the European Union and Latin America.

Oil prices have been supported by plummeting Venezuelan production, in addition to a solid global demand and supply concerns stemming from tensions in the Middle East.

US crude futures rose 0.8 percent to USD 71.83 per barrel, near last week's 3 1/2-year high of USD 72.30 while Brent crude futures notched up 0.8 percent to USD 79.10 per barrel. It had risen to USD 80.50 last week, its highest since November 2014.

New Thread: Stocks in the news: Britannia, Tata Steel, ONGC, SBI

From : Yatheendradas C.k. at 08:42 AM - May 21, 2018 ( )

May 21, 2018 08:31 AM IST | Source: Moneycontrol.com

Stocks in the news: Sobha, AU Small, Indoco Remedies, Atul Auto, Indiabulls Real, Thermax, UltraTech

Sobha | AU Small Finance Bank | Tata Chemicals | Sheela Foam | Amara Raja Batteries | Advanced Enzyme | Atul Auto | Gulf Oil Lubricants | Century Textiles | Parag Milk Foods | Manappuram Finance | Emami and Bhushan Steel are stocks which are in the news today.

Moneycontrol News@moneycontrolcom

Results Today: DLF, Action Construction Equipment, Hatsun Agro Product, IL&FS Transportation Networks, Just Dial, Petronet LNG, TTK Prestige, Ucal Fuel Systems

Ex-Bonus- GM Breweries 1:4

 Ex-Dividend: Merck, Mold-Tek Pack, Mold-Tek Tech

Dalmia Bharat has reported a 2.6 percent decline in profit at Rs 209 crore and 8 percent increase in revenue with margin contraction of 360 basis points YoY.

USFDA successfully complete inspection at Indoco Remedies' API manufacturing facilities at Patalganga and Rabale, Navi Mumbai

Bhushan Steel will remain in focus as Tata Steel took over the company by paying Rs 35,200 crore to financial creditors. The stock rallied nearly 18 percent in the passing week.

South Indian Bank: RBI has imposed Rs 5 crore penalty on the bank for non-compliance in norms related to IRAC, KYC Norms, treasury function.

Reliance Communications said it is filing appeal against as also application for stay of against the Insolvency & Bankruptcy Code order dated May 15 passed by NCLT, Mumbai bench in National Company Law Appellate Tribunal.

Tata Chemicals has posted a 23 percent increase in March quarter profit at Rs 356 crore and 1.7 percent rise in revenue with margin expansion of 130 basis points YoY.

AU Small Finance Bank will raise Rs 1,000 crore via sale of equity, issue of convertible warrants and these funds will be raised from unit of Singapore-based Temasek Holdings.

Indiabulls Real Estate board has approved share buy back plan worth Rs 624 crore.

Den Networks has narrowed its March quarter net loss to Rs 10 crore from Rs 60 crore in same quarter last year.

Emami: Sebi cleared seven present and former promoters of FMCG company Emami of insider trading charges.

Manappuram Finance's March quarter profit fell 9 percent to Rs 182 crore YoY.

Parag Milk Foods: The Reserve Bank of India allowed non-resident Indians to raise their stake in company up to 24 percent from earlier limit of 10 percent.

Vijaya Bank defers its capital raising plan

UltraTech Cement: Board approved scheme of arrangement wherein the company acquires cement business of Century Textiles and Industries

Balaji Telefilms Q4: Loss at Rs 33.88 crore versus profit at Rs 24.8 crore; revenue at Rs 93.73 crore versus Rs 64.66 crore (QoQ)

-Board approved appointment of Sunil Lulla as Group Chief Executive Officer of the company, effective May 25

ITI Q4: Profit at Rs 107.84 crore versus Rs 141.96 crore; revenue at Rs 789.9 crore versus Rs 700.13 crore (YoY)

Generic Engineering Construction and Projects Q4: Profit at Rs 3.6 crore versus Rs 1.8 crore; revenue at Rs 35.7 crore versus Rs 38.09 crore (YoY)

-Board approved sub-division of 1 equity share of face value of Rs 10 each into 2 equity shares of face value of Rs 5 each.

Sobha Q4: Profit at Rs 65.4 crore versus Rs 47 crore; revenue at Rs 769.6 crore versus Rs 588.8 crore (YoY)

Schneider Electric Infrastructure Q4: Loss narrows to Rs 22.95 crore versus Rs 157.3 crore YoY but widens from Rs 7.3 crore QoQ; revenue at Rs 285 crore versus Rs 290.58 crore YoY and Rs 470.5 crore QoQ

Gulf Oil Lubricants India Q4: Profit at Rs 41.35 crore versus Rs 31.2 crore; revenue at Rs 373.3 crore versus Rs 285.66 crore (YoY)

TCS: Board has fixed June 2 as the record date for determining the entitlement of members to receive bonus shares

Mangalam Organics Q4: Profit at Rs 2.83 crore versus Rs 0.85 crore; revenue at Rs 56.4 crore versus Rs 49.5 crore (YoY)

PNB Gilts Q4: Profit at Rs 10.9 crore versus Rs 11.78 crore; revenue at Rs 103.5 crore versus Rs 60.68 crore (YoY)

BL Kashyap and Sons Q4: Profit at Rs 26.01 crore versus Rs 10.49 crore; revenue at Rs 239.8 crore versus Rs 889.49 crore (YoY)

Precision Camshafts: Acquisition of 51 percent equity shares of EMOSS Mobile Systems BV, Netherlands through PCL (International) Holding BV, Netherlands, a wholly owned subsidiary of the company

Gujarat Ambuja Exports Q4: Profit at Rs 78.9 crore versus Rs 33.65 crore; revenue at Rs 880.7 crore versus Rs 1076.3 crore (YoY)

Thermax: Board approved to enter into a preliminary understanding with Babcock & Wilcox India Holdings Inc. (B&W) to acquire shareholding of the latter in the JV, Thermax Babcock & Wilcox Energy Solutions Private Limited (TBWES)

Atul Auto Q4: Profit at Rs 11.69 crore versus Rs 6.38 crore; revenue at Rs 150.6 crore versus Rs 116.4 crore (YoY)

Advanced Enzyme Technologies Q4: Profit at Rs 28.3 crore versus Rs 21.7 crore; revenue at Rs 108.6 crore versus Rs 85.4 crore (YoY)

IFGL Refractories Q4: Profit at Rs 19.8 crore versus Rs 15.5 crore; revenue at Rs 228.3 crore versus Rs 209.40 crore (YoY)

Rushil Decor Q4: Profit at Rs 9.03 crore versus Rs 6.7 crore; revenue at Rs 88.08 crore versus Rs 84.73 crore (YoY)

Sanghi Industries Q4: Profit at Rs 18.6 crore versus Rs 26.3 crore; revenue at Rs 253.6 crore versus Rs 246.65 crore (YoY)

Balrampur Chini Mills March Quarter: Loss at Rs 42.7 crore versus profit at Rs 200.4 crore; revenue at Rs 1,025.5 crore versus Rs 846.09 crore (YoY)

HCC: PM Modi inaugurates Kishanganga Hydro Power project constructed by the company

Yash Papers Q4: Profit at Rs 0.37 crore versus Rs 3.75 crore; revenue at Rs 52.85 crore versus Rs 48.77 crore (YoY)

Zenotech Laboratories Q4: Loss at Rs 1.6 crore versus loss at Rs 4.06 crore; revenue at Rs 2.77 crore versus Rs 1.76 crore (YoY)

Skipper: Board has approved a capex plan for capacity expansion of its engineering products division.

Manappuram Finance accepted resignation of Kapil Krishan, Chief Financial Officer of the company.

Kotak Mahindra Bank: Board approved raising of funds by way of non-convertible debentures / bonds for an amount not exceeding Rs 5,000 crore and by way of non-convertible preference shares for an amount not exceeding Rs 500 crore etc.

Pennar Industries Q4: Profit at Rs 47.52 crore versus Rs 13.39 crore; revenue at Rs 503.08 crore versus Rs 463.91 crore (YoY)

Amara Raja Batteries Q4: Profit at Rs 109.8 crore versus Rs 99.19 crore; revenue at Rs 1,580.7 crore versus Rs 1,344.46 crore (YoY)

OCL India: Board decided to set up a new cement plant in Odisha along with waste heat recovery system and split cement manufacturing units in the eastern part of India with cement manufacturing capacity of 8 Mn TPA with a total investment of Rs 3,720 crore. The project is estimated to be completed within 24 months.

Winsome Yarns Q4: Loss at Rs 7.23 crore versus profit at Rs 2.6 crore; revenue at Rs 87.7 crore versus Rs 104.7 crore (YoY)

Union Bank of India: Dai-Ichi Life Holdings Inc, Japan invests in Union Asset Management Company Private Limited through compulsorily convertible preference shares (CCPS). Dai-ichi Life Holdings Inc. holds 39.62 percent stake in Union AMC and consequently, Union AMC is now co-sponsored by Union Bank of India and Dai-ichi Life Holding Inc., Japan.

Sheela Foam Q4: Profit at Rs 32.16 crore versus Rs 16.7 crore; revenue at Rs 527.9 crore versus Rs 458.3 crore (YoY)

Future Lifestyle Fashions Q4: Profit at Rs 25.94 crore versus Rs 72.3 crore; revenue at Rs 976.85 crore versus Rs 986 crore (YoY)

Capacite Infraprojects Q4: Profit at Rs 22.38 crore versus Rs 26.72 crore; revenue at Rs 380.9 crore versus Rs 303.4 crore (YoY)

New Thread: FINANCIAL NEWS IN A NUT SHELL

From : Yatheendradas C.k. at 06:10 AM - May 21, 2018 ( )

Enthused by successful conclusion of
Bhushan Steel case, the Finance
Ministry expects banks to write back more
than Rs 1 lakh crore after the resolution of all
12 NPA cases referred to insolvency
proceedings by the RBI it its first list. The
remaining 11 NPA cases which are in the
pipeline will easily bring to the table over Rs
1 lakh crore and the amount coming from
resolution under the Insolvency and
Bankruptcy Code (IBC) will directly add to the
bottomline and help in reduction of  NPAs of
the PSBs, a senior Finance Ministry official
told. -Economic Times


Punjab National Bank (PNB) saw wilful
defaults by big borrowers slipping further to
Rs 15,199.57 crore in April this year over the
previous month, soon after suffering a record
loss of more than Rs 13,400 crore for
Jan-March due to frauds and bad loans. -Business Line


Bank of Baroda said it has consolidated all its
operational activities at a shared service
center (SSC), which employs over 2,000
people, at Gujarat's GIFT City. Operational
services such as retail loan processing,
deposit account opening, forex 
transactions, call center, among others have
been migrated to the SSC. -Economic Times


PNB has refused to disclose details of the
audit or investigation that led to detection of
over Rs 13,000 crore fraud, citing a clause
that bars any disclosure that can impede the
process of investigating or apprehending the
offenders. In reply to an RTI query, the bank
also declined to share copy of inspection
reports related to the scam. -Economic Times
SEBI will consider penal action against PNB
and Gitanjali Gems  after completion of its
probe into suspected trading and disclosure
related issues in the matter of over Rs 14,000
crore banking fraud, senior officials said. It
last week issued a warning letter to PNB for
delaying disclosures to stock exchanges
about the fraudulent transactions. However,
the probe is continuing and the penal action
would depend on the final outcome of the
investigation, the officials added. -Economic Times


The CBI is likely to approach Interpol for
a Red Corner Notice against absconding
 Nirav Modi and Mehul Choksi who are
allegedly the brains behind the over USD 2
billion scam in PNB, agency sources said. -Economic Times


Asserting that the insolvency law has
brought in behavioural changes among
stakeholders, IBBI chief M S Sahoo has said
the best use of the Insolvency
and Bankruptcy Code would be in "not using
it at all". According to Sahoo, the inevitable
consequences of a resolution process deter
the management and promoter of a company
to make best efforts to avoid a default.
-Economic Times


India is the sixth wealthiest country in the
world with a total wealth of $8,230 billion,
while the U.S. is the richest nation globally,
says a report. According to the AfrAsia Bank
Global Wealth Migration Review, the U.S. is
the wealthiest country in the world with a
total wealth of $62,584 billion, followed by
China ($24,803 billion) at the second place
and Japan ($19,522 billion) at the third place. “Total wealth” refers to the private wealth
held by all the individuals living in each
country. -News 18


The petrol price today touched a record high
as the oil PSUs passed on 4 weeks of
relentless rise in international oil prices to
consumers. Petrol price today increased by
33 paise a litre in Delhi -- the highest since
the daily price revision came into force in
mid-June 2017, and diesel by 26 paisa. Rates vary from state to state depending on
the incidence of local sales tax or VAT. Prices in Delhi are the cheapest in all metros
and most state capitals. -Business Line

 

New Thread: Stock Markets tips:

From : Yatheendradas C.k. at 05:47 AM - May 21, 2018 ( )

Stock Markets tips: Find out if you should invest in a growth stock

Investing in a growth stock has high upside potential and vice versa. If you invest in it, consistently monitor the same for any hidden weakness

By: P Saravanan | New Delhi | Published: May 21, 2018 2:31 AM  The Financial Express

The classic confusion in the minds of shareholders is whether growth companies are good investments. The answer is ‘yes and no’. Because, shares of growth companies are not always necessarily good investments. Recognition of this difference is absolutely essential for successful investing.

What is a growth company?

Growth companies are those companies that consistently experience above-average increase in sales and earnings. This definition has some limitations because many firms could qualify due to certain accounting procedures, mergers or other external events. So, literature provides another explanation for a growth company. Growth companies are firms with the ability and the opportunities to make investments that yield rates of return greater than the firm’s required rate of return. In addition, a growth company that has above-average investment opportunities should, and typically, retain a large portion of its earnings to fund these superior investment projects and generally it pays less dividend.

What is a growth stock?

A growth stock is a stock with a higher rate of return than other stocks in the market with similar risk characteristics. The stock achieves this superior risk-adjusted rate of return because at some point in time, the market undervalued it compared to other stocks. Although the stock market adjusts stock prices relatively quickly and accurately to reflect new information, available information is not always perfect or complete. Therefore, imperfect or incomplete information may cause a given stock to be undervalued or overvalued at a point in time.

Factors to be considered while identifying growth stocks:

Potential growth: As growth companies provide superior returns, it is essential to assess whether the potential growth in terms of revenue, profit margin, etc., are sustainable in the long run. If either the current market price is more than its intrinsic value, or its growth has slowed down, it is better to avoid those shares.

R&D expenses: To sustain in the market for a long time, companies need to either improvise their existing products and services or introduce new products and services. Though this is essential for all companies, for certain specific industries such as pharmaceutical, auto, etc., it is mandatory. While assessing the future growth of a company, investors need to pay attention to the R&D expenses of the company during the last couple of years and its correlation with the revenue.

Managing the challenges: Investors need to assess how companies respond and manage the challenges and how fast they respond and react. The changes could be either internal or external. For instance, how well a company handle a situation when the relevant laws were amended by the authorities.

Focus more on qualitative aspects: Sometimes financial analysis can miss out on identifying growth stocks. So, focus on qualitative aspects such as the promoters’ group, their interest in the business, board of directors and their expertise, representation of professional non-promoters in the board, employee friendliness, etc. which will help in identifying a growth stock.
To conclude, investing in a growth stock has high upside potential and vice versa. As an investor, if you invest in growth stock you should consistently monitor the same for any hidden weakness that could possibly lead to slow momentum.

The writer is professor of finance & accounting, IIM Tiruchirappalli

 

New Thread: Thoughts for the Day May 21st, 2018

From : Yatheendradas C.k. at 05:41 AM - May 21, 2018 ( )

21st May, 2018

Image result for quotes

New Thread: Hold tight! Nifty might be heading lower in May series

From : Yatheendradas C.k. at 09:36 PM - May 20, 2018 ( )

May 20, 2018 12:33 PM IST | Source: Moneycontrol.com

Hold tight! Nifty might be heading lower in May series; avoid small and midcaps

Two candlestick reversal patterns at an important retracement level mean that 10,915 is now an important hurdle and we are unlikely to go above it.

Kshitij Anand

Rohit Srivastava, Fund Manager – PMS, Sharekhan by BNP Paribas said two candlestick reversal patterns at an important retracement level mean that 10,915 is now an important hurdle and the Nifty is unlikely to go above it. “In other words, we are headed lower in May series,” he told Moneycontrol’s Kshitij Anand.

Q) The Nifty slipped nearly two percent for the week-ended May 18. It broke below its crucial support levels on the charts. Do you think we are headed lower in the May series?

A) After going up for seven weeks, the Nifty stalled exactly at its 78.6% retracement level and sold-off. In doing so, it formed a Shooting Star Doji pattern on Tuesday. It also happened to coincide with the Karnataka election verdict as prices went to the highest level and sold off intraday.

At the end of the week, it formed an Engulfing Bear pattern. This pattern is formed when the index opens above last week’s close but closes below last week’s opening level.

Two candlestick reversal patterns at an important retracement level mean that 10,915 is now an important hurdle and we are unlikely to go above it. In other words, we are headed lower in May series.

Q) MACD gave a sell signal on the daily charts on Thursday for the first time since March. What are its implications?

A) A sell signal from momentum indicators like moving average convergence divergence (MACD) occurs after weeks of rallying on thin volumes and negative breadth. This means that the trend reversal is not a correction or consolidation but a decline.

If 10,915 marks a lower top than the January high, it raises the odds of a lower bottom below its 9,950 low in coming weeks. A lower top-bottom formation would then confirm the onset of a bear market

Q) Plenty of stocks hit fresh 52-week lows this week instead of a 52-week high. Do you think these are stocks which are carrying the momentum and should investors ideally book profits or stay away from them?

A) If people are still long on stocks that are making 52-week lows, they need to assess why they bought them in the first place. If the trades have gone bad, then an exit is usually the first decision.

The risky strategy is to try catching a falling knife. To buy when stocks are falling like nine pins, without waiting for a clear sign of bottom from the market or Nifty itself, is not the right thing to do. So, managing risk by selling is what’s needed now.

Q) What is your call on smallcap and midcap stocks? Should investors stay away or just book profits on rallies?

A) Midcap and smallcap stocks are reversing a trend of outperformance that was in existence since 2013. Starting January, midcaps and smallcap stocks are underperforming the Nifty. Such a trend once started can go on for a period of time say one-to-two years and therefore it is too early to get back into them. This is not the time to delve into such stocks.

It is rare where one stock or sector holds out in such a period and only if you are sure of such an event should you take exposure. Do keep in mind that it could take time to play out when the rest of the market is under pressure. The general idea, however, should be to avoid this segment for now.

Q) What is your call on crude for the coming week?

A) Crude oil prices have been making higher tops and bottoms and there is no sign of a trend reversal yet. $68-69 per barrel is likely to be a strong support zone and we are most likely headed towards $75 per barrel or higher in the coming days.

Q) Top 3-5 positional calls which could give handsome returns to investors in the next one month?

A) The Anil Dhirubhai Ambani Group (ADAG) group has been a in the news of late but for all the wrong reasons. Past analysis shows that when midcaps are in turmoil, these stocks lead the way down and therefore are great short-selling candidates.

Reliance Capital, Reliance Infrastructure and Reliance Power are looking good for another 10 percent fall from here on, with a risk of a 2-3 percent upside in the coming month.

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

New Thread: What will drive stocks markets this week

From : Yatheendradas C.k. at 08:54 PM - May 20, 2018 ( )

What will drive stocks markets this week

According to another market expert, investors will be keeping an eye on this week's Federal Open Market Committee (FOMC) minutes and the US jobs data to get some cues on interest rate hike trajectory.

By: PTI | Mumbai | Published: May 20, 2018 1:51 PM  The Financial Express

Earnings from bluechips such as SBI and Cipla, and movement of crude oil and its impact on inflation and trade deficit will set the tone for stock markets this week, say analysts. Political developments in Karnataka, which saw fall of the three-day-old BJP government on Saturday minutes before the scheduled trust vote, could have a short-term bearing on stocks, they added. “The impact of the Karnataka political outcome will be short-lived. This is not likely to impact the prospects of NDA in the general elections of 2019. From now on, till elections to Madhya Pradesh, Rajasthan and Chhattisgarh later this year, economics will dictate the direction of the market than politics,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

He said immediate concern to the market will be the impact of crude at $80 on inflation, interest rate, exchange rate and GDP growth rate. “With the macros turning unfavourable with the crude spike, the upside to the market is capped. If crude continues to rise and cross $85 there will be a sell-off in the market. Otherwise the market will be range-bound,” Vijayakumar added. “Rising crude, bond yields and dollar have been the worries of market from quite some time in terms of its impact on fiscal deficit, inflation and RBI policy. Further up move in crude prices or rising yields is likely to be negative for markets,” said Teena Virmani, Vice President – Research, Kotak Securities Ltd.

According to another market expert, investors will be keeping an eye on this week’s Federal Open Market Committee (FOMC) minutes and the US jobs data to get some cues on interest rate hike trajectory. Stock specific action may be seen in view of corporate results scheduled for this week, he said. Among major earnings this week are from Cipla, Dr Reddy, SBI, Jet Airways, Tata Motors and Gail. The benchmark BSE Sensex lost 687.49 points, or 1.93 per cent, to close at 34,848.30 on Friday.

New Thread: Stock markets alert: Another phase of correction

From : Yatheendradas C.k. at 08:51 PM - May 20, 2018 ( )

Stock markets alert: Another phase of correction on the cards; here’s why

The report further noted that domestic liquidity is holding up the market. Domestic mutual fund SIP flows have now reached USD 1 billion a month.

By: PTI | New Delhi | Published: May 20, 2018 12:35 PM  The Financial Express

The Indian economy is in the beginning of an economic recovery, but there are thick headwinds for domestic equity markets going ahead and another phase of correction is likely, says a report. According to the report by Edelweiss Investment Research, approaching elections, elevated bond yields, emerging market currency weakness and deteriorating current account is likely to keep Indian markets under check. “Nifty is likely to trade near the 10,000 level in the short term and as we approach FY19 end,” the report said.

It further noted that “weakness in breadth throws out cautious signal for the trend. This indicates that markets may see another phase of correction.” “We expect Nifty to face another round of selling towards the March 2018 lows”. In March this year, the 30-share sensitive index fell 10.16 per cent to 32,596.54 points on March 23, from a high of 36,283.25 on January 29. The report further noted that domestic liquidity is holding up the market. Domestic mutual fund SIP flows have now reached USD 1 billion a month. This is a sizeable and supportive number and has been instrumental in keep stock volatility under check.

“Domestic flows may not be able to dictate the direction of the market but would continue to keep volatile under check,” the report noted. Regarding the earnings growth of Nifty companies, the report said though it was in line with projections but was largely supported by heavyweights. Among the 26 Nifty companies with reported results, Nifty has reported a PAT growth of 15 per cent. The earnings growth was largely supported by heavyweights like TCS, Reliance, HDFC Bank and HDFC. Excluding these companies, Nifty earnings has missed estimates by 6 per cent, the report noted.

 

New Thread: Fuel prices skyrocket!

From : Yatheendradas C.k. at 08:49 PM - May 20, 2018 ( )

Petrol price in Delhi, Chennai, Bangalore, rest of India today: Check details as fuel prices skyrocket!

This is the seventh straight day of price increase since oil PSUs on May 14 resumed daily price revision after a 19-day pre-Karnataka poll hiatus.

By: PTI | New Delhi | Updated: May 20, 2018 12:31 PM  The Financial Express

Petrol price today touched a record high of Rs 76.24 per litre and diesel climbed to its highest ever level of Rs 67.57 as the oil PSUs passed on four weeks of relentless rise in international oil prices to consumers. Petrol price today increased by 33 paisa a litre in Delhi — the highest since the daily price revision came into force in mid-June 2017, and diesel by 26 paisa, according to price notification issued by state-owned oil firms. Rates vary from state to state depending on the incidence of local sales tax or VAT. Prices in Delhi are the cheapest in all metros and most state capitals. With this increase, petrol has touched an all time-high, breaching the previous high of Rs 76.06 touched in Delhi on September 14, 2013. Diesel rates are also at the all-time high level.

This is the seventh straight day of price increase since oil PSUs on May 14 resumed daily price revision after a 19-day pre-Karnataka poll hiatus. In all, petrol price has been raised by Rs 1.61 a litre and diesel by 1.64 in last one week. In India, petrol is the costliest in Mumbai where high local taxes has led a price of Rs 84.07 per litre. Petrol has breached Rs 80 mark in Bhopal (Rs 81.83 a litre), Patna (Rs 81.73), Hyderabad (Rs 80.76) and Srinagar (Rs 80.35), according to the price notification. Petrol in Kolkatta costs Rs 78.91 per litre while it is priced at Rs 79.13 in Chennai. The cheapest petrol is available in Panjim where a litre comes for Rs 70.26. Diesel is the costliest in Hyderabad were it is priced at Rs 73.45 a litre due to high local taxes. It is priced at Rs 73.34 in Trivandrum.

Other cities where diesel rates have crossed Rs 70 mark are Raipur (Rs 72.96 a litre), Gandhinagar (Rs 72.63), Bhubhaneswar (Rs 72.43), Patna (Rs 72.24), Jaipur (Rs 71.97), Ranchi (Rs 71.35), Bhopal (Rs 71.12) and Srinagar (Rs 70.96) A litre of diesel costs Rs 71.94 in Mumbai, Rs 70.12 in Kolkatta and Rs 71.32 in Chennai, the notification said. Diesel is the cheapest in Port Blair where it is priced at Rs 63.35. On Friday, Economic Affairs Secretary Subhash Chandra Garg refused to say if the government will cut excise duty on auto fuel to ease the burden on consumers. The government is watching the situation developing from oil prices hitting USD 80 a barrel — the highest since November 2014, and adequate steps will be taken, is all he said said without elaborating.

Asked if the government would cut excise duty on petrol and diesel, he had stated that he has nothing to say on that front. “Just watch.” The BJP-led government had raised excise duty nine times — totalling Rs 11.77 per litre on petrol and Rs 13.47 on diesel — between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre. No sooner had Karnataka polled to elect a new state government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) on Monday ended a hiatus in revising petrol and diesel prices that began on April 25 and reverted to the 11-month old practices of changing rates on a daily basis.

Oil PSUs are estimated to have lost about Rs 500 crore on absorbing higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar during the nearly three week hiatus. The benchmark international rate for petrol, used for revising rate on April 24, had gone up from USD 78.84 per barrel to USD 84.97 on May 14. It has further risen to USD 84.97, indicating more daily hikes would be needed to level retail price with cost. Similarly, benchmark international diesel rates during this period have climbed from USD 84.68 per barrel to USD 90.28 pr barrel. Also, the rupee has weakened to Rs 67.27 per US dollar from Rs 66.62, making imports costlier.

New Thread: Nifty likely to be in 10,500-10,700 range

From : Yatheendradas C.k. at 10:08 AM - May 20, 2018 ( )

May 20, 2018 09:59 AM IST | Source: Moneycontrol.com

Nifty likely to be in 10,500-10,700 range; PSU, pharma, cement, midcap stocks may see pressure

Bajaj Finance, IndusInd Bank, Kotak Mahindra Bank, Hindustan Unilever, Colgate Palmolive, Titan, Tech Mahindra and TCS are showing strength.

Moneycontrol Contributor

Chandan Taparia

Nifty index continued its losing streak for fourth consecutive session and formed a Bearish Belt Hold candle on daily and Bearish Engulfing on the weekly scale which indicates that bears are getting some grip after the strong move of around 1,000 points.

It has negated its higher lows formation on weekly scale after momentum of last seven weeks. Now if it holds below 10,680 zone, then weakness could extend towards its next support of 10,550-10,500 zone while on the upside hurdles are seen at 10,680 then 10,725 levels. Index is heading towards its 50-DEMA and needs to surpass immediate hurdles to get a short term market stability. 

Derivatives

Nifty index wiped out its entire gains made in the previous two weeks and remained negative for last four trading sessions. India VIX moved up by 5.52 percent to 14.15 levels in the last session. Spurt in the volatility with decline in Put Call Ratio suggests that bears are getting grip and resistances are gradually shifting lower.

On the option front, Maximum Put open interest (OI) is at 10,500 followed by 10,600 strike while maximum Call OI is at 11,000 followed by 10,800 strike. We have seen meaningful call writing at 10,600 followed by 10,700 and 10,800 strikes which is restricting its upside momentum while Put unwinding is seen at all the immediate strikes which is giving a scope for further decline. Option data suggests an immediate trading range between 10,500 to 10,700 zones.

Bank Nifty corrected by around 1,100 points in last four sessions from its recent high of 26,972 to 25,839 levels. It is forming lower highs - lower lows on daily scale from last four trading sessions and also made a Dark Cloud Cover candle on weekly scale. Now, till it sustains below 26,100 levels, weakness could be seen towards 25,750 and 25,500 levels while on the upside hurdle is seen at 26,250 levels.

Nifty Midcap index has been falling down from last three weeks and wiped out all the gains made in the month of April 2018. Nifty index has lost all its gain of this series and came near to its series opening levels while Bank Nifty is still up by 3.50 percent in the May series.

Selective Private Banks, Financial, FMCG and Consumer stocks are holding some gains while most of the PSU, Pharma, Cement and Midcap stocks are likely to see further declines.

On stocks front, Bajaj Finance, IndusInd Bank, Kotak Mahindra Bank, Hindustan Unilever, Colgate Palmolive, Titan, Tech Mahindra and TCS are showing strength.

Disclaimer: The author is Associate Vice President, Analyst-Derivatives, Motilal Oswal Securities. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decision

New Thread: IRCTC Tatkal Ticket Reservation: New Booking Facility

From : Yatheendradas C.k. at 06:28 AM - May 20, 2018 ( )

IRCTC Tatkal Ticket Reservation: New Booking Facility, Cancellation Rules, Timings, Charges

Tatkal ticket booking charges are calculated as a percentage of fare subject to minimum and maximum charges.

New Thread: FINANCIAL NEWS IN A NUT SHELL

From : Yatheendradas C.k. at 05:50 AM - May 20, 2018 ( )

As Tata Steel's subsidiary Bamnipal Steel Ltd
acquired Bhushan Steel on Friday, Union
Minister Piyush Goyal scurries to take credit
for the deal, that is set to help the banks
recover NPAs amounting to over Rs 36,000
crore in the time to come. He said,
"Liquidation value of Bhushan Steel was Rs
14,541 crore but creditors received almost 4
times the amount (Rs 36,400). This was
possible due to the robust and transparent
Insolvency & Bankruptcy Code brought by
this Government." -NDTV Profit


After seeing 4 of its bond auctions partially
remaining unsold, the RBI managed to sell
the entire stock of its Friday’s Rs 120 billion
auction to the market. The RBI, on behalf of
the government, sold five bonds, including
one fixed rate bond maturing in 2031, against
which it raised Rs 40 billion. -Business Standard


The RBI has imposed a penalty of ₹5 crore on
South Indian Bank for non-compliance with
its directions on Income Recognition and
Asset Classification (IRAC) norms, KYC
norms and treasury function. The central
bank, in a statement, said the penalty has
also been imposed on the bank for
deficiencies in its compliance function and
compliance culture. -Business Line


The Bank of India would be able to realise
around Rs 1,993 crore from the first
successful NCLT resolution concerning Tata
Steel and Bhushan Steel, an official said. The
amount would not include hair-cuts, BOI MD&
CEO Mohapatra said. -Business Line


Failing to find a mutually agreed solution in
the stipulated 30 days to India’s export
promotion programmes which the US claims
have harmed American workers, Washington
has escalated the issue at the WTO and
asked it to refer the matter to the Dispute
Settlement Body, said an official. -Economic Times

New Thread: Outlook on oil prices: Oil on the boil

From : Yatheendradas C.k. at 05:40 AM - May 20, 2018 ( )

Outlook on oil prices: Oil on the boil

ANAND KALYANARAMAN   BUSINESS LINE

Oil has staged a strong comeback, but there are factors that could cap the rally

 

For India that imports more than 80 per cent of its crude oil requirement, the past year has not been a good one on energy pricing. Global oil price (Brent) and, along with it, the price of the Indian crude oil basket has rallied more than 70 per cent since mid-June last year — from about $45 a barrel to almost $80 now. This is a sharp reversal from the rout that saw oil prices crash from about $115 a barrel in mid-2014 to less than $30 in early 2016 before recovering to $45-$55 levels.

The rally in oil has adverse implications on several macro-indicators such as the country’s import bill, its current account deficit and the currency value, with these parameters feeding into each other.

Until last year, the popular wisdom was that crude oil, even if it rallies, was unlikely to go beyond the $65-$70 a barrel mark. This was based on the assumption that US shale oil — a game-changer that triggered the global oil rout — would make a strong comeback, and higher output would keep a cap on prices. But yet again, oil has proved that trying to forecast its movement is a mug’s game.

Reasons behind the rally

The sharp rally over the past year has been aided by a few factors. One, the output cut deal between the Saudi Arabia-led OPEC (Organisation of the Petroleum Exporting Countries) and some major non-OPEC players, including Russia, finally showed results and squeezed out much of the excess oil inventory in the market.

Two, the economic meltdown in Venezuela has resulted in a sharp cut (about 40 per cent) in the country’s oil production.

Three, with Donald Trump as US President, there was always the overhang of the US pulling out of the Obama-led nuclear deal with Iran — a risk that finally played out earlier this month. Now, with the US likely to re-impose economic sanctions on Iran, the latter’s oil exports that had picked up in 2016 and 2017 after the nuclear deal, will fall again; estimates of the cut vary between 5,00,000 and 1 million barrels per day. At the upper end, that’s about 1 per cent of the global consumption of about 100 million barrels a day.

Finally, the pick-up in the global economy resulted in smart demand increase for crude oil and aided its price ascent last year. The US shale oil industry has been responding to higher prices and has stepped up output, but that has not been enough to offset the perfect storm of factors that propelled oil higher.

Oil may have run its course

How far up can oil go? Can it again reach the three-digit mark? Nothing can be ruled out for a commodity that has swung from $115 to $26 to $80 a barrel in four years. That said, the rally may have run its course and oil could take a breather.

A few factors support this view. The OPEC and non-OPEC countries’ deal to cut oil output by about 1.8 million barrels a day is until December 2018. The chance of another extension seems unlikely — the objectives of the deal have largely been met. Also, Russia was reportedly reluctant on an extension last year to prevent giving the price advantage to US shale players.

Next, how successful the US move on Iran will be needs to be seen. Unlike the last time, the US seems isolated and does not have the support of the major European powers such as France and Germany. Also, major consumers China and India could well continue importing oil from Iran; this could mean lower-than-expected supply disruption in the market. Also, there are indications that the OPEC will step in to make up the shortfall from the Iran squeeze. Finally, lucrative prices will incentivise US shale oil producers to speed up their output growth further. In short, higher oil supply than expected may be coming; this could keep prices under check despite demand growth.

Oil, economics and politics are often closely linked. But there are striking contradictions between the political alignments and the economic interests of some key players in the oil game now. While the US-Saudi Arabia-Israel troika wants to undermine Iran’s political and military influence in West Asia by re-imposing sanctions, US shale producers and Saudi Arabia are now primary competitors in the oil sphere. Also, Russia backs Iran on the political and military fronts but is part of the Saudi-led oil output cut deal. Unravelling of any of these contradictions could help increase global oil supply and cap the price rise.

On the other hand, there is also the risk of further rise in oil prices. Saudi Arabia is preparing for the multi-billion dollar public offering of its oil giant, Saudi Aramco, and would like high oil prices to aid the issue’s success. Besides, increased risk of armed conflicts in West Asia due to recent geo-political developments could cause a supply shock. Also, the pain in Venezuela could deepen with likely US sanctions after the elections there.

India, its consumers and oil companies would rather that oil takes a break now; they feel the pinch badly.Impact on oil sector

Oil-politics-economics hurts public sector oil companies

The crude oil spike can, in theory, help both refiners-cum-marketers and oil producers by bestowing inventory gains on the former and improving price realisations for the latter. That, in turn, should get a thumbs-up from the equity market. But that’s not how the script has played out for the major public sector oil company stocks. The PSU oil marketing companies (OMCs) — Indian Oil, HPCL and BPCL — have lost 20-30 per cent on the bourses since end-October 2017, even though crude oil prices have rallied about 30 per cent. The stocks of the PSU upstream companies — ONGC and Oil India — have lost 3-5 per cent during this period. The market seems worried about the fallout of the oil-politics-economics cocktail on the fortunes of the public sector oil companies, and justifiably so.

Tenuous freedom

A pattern is emerging of the PSU OMCs capitulating to the diktats of their major shareholder, the government, and losing their so-called pricing freedom on petrol and diesel in the poll season. It happened during the run-up to the Gujarat State elections last December and, more recently, repeated itself prior to the Karnataka State elections.

In November 2017, with a month to go for the Gujarat Assembly elections, oil prices had breached $60 a barrel and were on their way up. Global petrol and diesel prices, based on which the OMCs set fuel rates in India, were also going north. The price of petrol and diesel should have increased. Instead, Indian Oil’s petrol price in Delhi hovered around 69 a litre despite the ‘dynamic’ daily pricing mechanism since mid-June. Similarly, diesel prices were stuck around 58 a litre.

Indian Oil’s marketing margin took a knock — falling from 3 for a litre of petrol in end-October to just about 1 by end-November. This continued until the Gujarat elections in mid-December 2017, after which petrol prices started rising again and played catch-up. By end-March, it was up to 73.5 a litre and Indian Oil’s marketing margin increased to almost 3.5 a litre.

The go-slow on fuel prices before the Gujarat elections worsened to a complete freeze before the Karnataka polls on May 12. For 19 days, the petrol price remained unchanged; Indian Oil charged the same 74.63 a litre of petrol in Delhi every day from April 24 to May 13. It was only on May 14 that the daily dynamic pricing was again invoked. Reports suggest that the OMCs lost 400-500 crore in profit in these 19 days of prize freeze — with oil prices steadily increasing and the rupee rapidly losing ground. The marketing margin reportedly fell to about 0.5 a litre of petrol in this period.

Sure, once the polls are over, the oil firms have stepped on the price pedal again. But whether that will be possible in the coming months needs to be seen, with an intense election cycle on the cards. Elections in Rajasthan, Madhya Pradesh and Chhattisgarh are lined up towards the end of the year. And then, the big prize, the Lok Sabha election, is likely to be held around April 2019. The PSU oil marketers could again be told to shoulder the burden of costlier oil, with the government unlikely to reduce excise duties and unwilling to earn voter ire. The upshot: the OMC stocks could remain under pressure.

Under-recovery threat

The pricing decontrol of petrol in 2010 followed by that of diesel in 2014 saw the under-recoveries of both upstream and downstream PSU oil companies fall sharply over the years. For the past two years, these companies have been completely spared the under-recovery burden, with the government fully absorbing the loss from selling domestic LPG and PDS kerosene below cost. But this was possible primarily due to low oil prices that kept the burden well under control.

The spike in oil price though could rock this boat. Oil price now (about $80 a barrel) is well above the government’s estimate of about $60 a barrel for 2018-19 and the actual subsidy burden for the year could overshoot, by a large mark, the estimate of about 25,000 crore. The need to maintain fiscal prudence could see the government transfer the excess burden to the PSU oil companies. This risk is higher for the upstream companies ONGC and Oil India that would otherwise have benefited from higher oil prices. A return of the subsidy burden could put a cap on their price realisations, offsetting potential gains.Impact on consumer

Squeezed by rising fuel prices, high taxes and a weak rupee

 

Petrol prices in India (about 76 a litre in Delhi) have climbed to near peak levels while diesel is at its costliest ever (about 67 a litre). Oil on the boil has left consumers hot under the collar. Oil prices have been rising, people agree. But, they ask, when the price of the Indian crude oil basket now ($78 a barrel) is still far lower that in mid-2014 ($112 a barrel), why do petrol and diesel today cost more than in mid-2014 (about 71 and 57 a litre respectively?)

Taxes, the culprit

The answer lies primarily in the fact that when the crude oil rout was underway from mid-2014 to early 2016, the Governments at the Centre and many States chose to pocket most of the gains through regular hikes in excise duty and VAT (value added tax) on petrol and diesel. Between November 2014 and January 2016, excise duty on petrol and diesel was raised nine times. In all, the total increase in excise was as much as 11.77 a litre of petrol and 13.47 a litre of diesel.

To add to this, many states upped their VAT rates when the going was good. High VAT rates are why consumers in some States such as Maharashtra and cities such as Mumbai have it worse than others.

In effect, only a relatively small portion of the cost reduction benefit was passed on to consumers. The understanding was that, if and when oil prices rose sharply, taxes would be cut to cushion consumers. But when it came to crunch, consumers have not been given meaningful relief.

When petrol and diesel prices began rising rapidly from the middle of last year, there was a furore. There were insinuations that the too-little-to-be-observed price changes under the daily pricing mechanism from mid-June were being used as a cover to give effect to sharp hikes cumulatively. The Centre, under intense public pressure, cut excise duty on petrol and diesel by 2 a litre in October. Some States followed with a cut in the VAT on these fuels. But this was a case of little and late.

Oil that had risen from $45 a barrel in mid-June to $55 a barrel by October went from strength to strength and is now around $80 a barrel. To add to the pain, the rupee has also slipped considerably in recent months and added to the rupee cost of crude oil.

The Centre and the States are now reluctant to roll back the tax hikes due to huge revenue implications — excise and VAT receipts from petroleum and oil products have ballooned sharply over the past few years. Excise duty on petrol now is 19.48 a litre of petrol and 15.33 a litre of diesel. The petroleum sector is a cash cow — it contributed 64 per cent of the Centre’s excise duty receipts and 24 per cent of its revenue receipts in 2016-17. Also, 8 per cent of the revenue receipts of the States in 2016-17 were contributed by the petroleum sector.

Sharing the burden

The burden then falls on fuel customers and/or oil marketing companies. The daily pricing mechanism since mid-June 2017 has seen steady, creeping increases in fuel prices, which customers have had to bear, despite protest, for most of the last year.

But there have been brief spells of respite for them in the run-up to major elections, when the burden shifted to PSU oil companies that had to go slow on hikes or freeze fuel prices.

This pattern may continue over the coming year, with consumers bearing the burden and the tab shifting to oil companies during election time. That said, with several State elections and the Lok Sabha elections slated over the coming year, the Centre may not want to antagonise voters too much. This could mean fewer price hikes and more go-slows/prize freezes than has been the case so far.

That’s also because higher oil prices have a knock-on effect on general inflation through increase in freight and other costs. According to the Petroleum Planning and Analysis Cell, petroleum products have weight of nearly 8 per cent in the wholesale price index (WPI), and an increase of 1 per litre in the price of petrol and diesel increases inflation by 0.03 per cent and 0.08 per cent respectively.

Published on May 19, 2018

New Thread: Thoughts for the Day May 20th, 2018

From : Yatheendradas C.k. at 05:32 AM - May 20, 2018 ( )

20th May, 2018

Image result for quotes

New Thread: Indices retreat on selling pressure

From : Yatheendradas C.k. at 09:48 PM - May 19, 2018 ( )

Indices retreat on selling pressure

The Nifty and the Sensex have reversed direction. Investors must remain cautious

 

It was a volatile week for the bellwether indices, the Nifty and the Sensex. After an initial rally, the indices encountered resistances and retreated, triggered by the outcome of the Karnataka State election results. The political drama kept the market nervous and the benchmark indices continued to decline to close the week in the negative territory. Moreover, the mid and small-cap indices extended their declines in line with the broader market.

Although the market may have discounted the election results and its outcome in Karnataka last week, there is room for further decline, following the setback for the BJP in the State. However, global markets can give some direction to the market this week. The movements of the rupee and crude oil also need to be watched.

Nifty (10,596.4)

The Nifty 50 index started the previous week on a flat note and, subsequently, rallied to record an intra-week high of 10,929 on Tuesday. But due to selling pressure and profit-taking, the index did a volte-face from this high and tumbled 3 per cent. For the week, the index closed, falling 210 points or 1.9 per cent.

Short-term trend: Last week, the index moved in both directions. After an initial rally to an intra-week high of 10,929, it lost momentum and fell to a low of 10,589. The index ended near the intra-week low and formed a bearish engulfing candlestick pattern in the weekly chart, implying a short-term trend reversal. The negative divergence in the daily price rate of change indicator and relative strength index also back this trend reversal.

The daily indicators show signs of weakness. On Friday, the index fell 0.8 per cent, breaching its 21-day moving average and a key support level of 10,700 decisively. With this fall, the short-term uptrend that has been in place since recording a trough at around 10,000 in late March, is weakening.

An immediate support is pegged at 10,500. A decisive fall below the significant support level of 10,350 will mar this uptrend and drag the index down to 10,250 and then to 10,100. Subsequent supports are at 10,000, 9,700 and 9,500 levels.

On the upside, the index needs to move beyond 10,700 to bring back bullish momentum and take the index higher to 10,800 and 10,900 in the short term. The next key resistance is pegged at 11,000.

Medium-term trend: The recent fall below the key support level of 10,700 shows that the previous break above this level was a false breakthrough. The index had failed to sustain above the key level of 10,700 last week. The medium-term downtrend that has been on place from the January peak of 11,171 continues. The on-going downtrend can find support at the key medium-term base of 10,400 in the coming weeks. That said, a conclusive tumble below 10,400 can pull the index down to 10,200 and 10,000 over the medium term. Subsequent supports at 9,500 and 9,200 will come to play.

On the other hand, the index needs to emphatically break above the immediate resistance at 10,700 to bring back bullish momentum and take it northwards to 11,000 and 11,200. Such a decisive breakthrough will alter the downtrend.

Sensex (34,848.3)

The Sensex met with a key barrier at around 36,000 and began to decline last week. It formed a bearish engulfing candlestick pattern in the weekly charting, signifying a short-term trend reversal. The index has slumped 687 points or 1.9 per cent last week, falling below the immediate support at 35,000 as well as its 21-day moving average.

The daily indicators display negative divergence and are wakening, backing the short-term trend reversal. Further fall can drag the index down to 34,500.

However, inability to find support at 34,500 can pull the index down to 34,200, 34,000 and 33,600 over the short term. Key resistances are placed at 35,000 and 35,500. An emphatic rally above 35,500 is needed to take the index higher to 35,800 and 36,000.

Medium-term trend: The index, failing to sustain above the key support level of 35,000 last week, indicates that the break-out was not a decisive one. Hence, it can continue to remain in a medium-term downtrend. An emphatic plunge below 34,000 will strengthen the downtrend and drag the index down to 33,400 in the medium term. Subsequent supports are pegged at 33,000 and 32,500 levels. Conversely, if the index breached above the vital resistance level of 35,000 decisively, an up-move to 35,800 and 36,000 is possible.

Nifty Bank (25,875.6)

Last week, the Bank Nifty surpassed its key resistance at 26,500, but encountered resistance at around 27,000 and reversed direction, forming a grave-stone doji candlestick pattern on Tuesday, which is a bearish reversal pattern.

Since then, the index has been on a corrective decline, triggered by negative divergence in the daily price rate of change indicators. On Friday, it fell below its immediate support at 26,000 and is likely to extend its down-move. However, the next key support at 25,500 can provide a base in the near term. Traders can make use of rallies to initiate fresh short positions with a fixed stop-loss at 26,100 and exit at 25,500.

A conclusive fall below 25,500 will be a threat to the uptrend that has been in place from the March low of 23,605. Significant trend-deciding support is in the 24,800-25,000 range. A strong plunge below this level can drag the index down to 24,500 and 24,000 over the medium term.

Consversely, if the index manages to close above 26,200, it can move up to 26,500 in the short term. Further break above 26,500 can take it to 27,000 and 27,500 levels.

Global cues

The Dow Jones Industrial Average tested key resistances at 24,800 and 25,000 and fell marginally to close the week at 24,715, declining 116 points. These resistances continue to hold. The index can re-test these levels in the coming week as well. A strong break above 25,000 can take the index upwards to 25,300 and 25,500 levels. Supports are pegged at 24,500 and 24,000 levels.

Published on May 19, 2018

New Thread: S-W monsoon expected to reach Kerala three days early

From : Yatheendradas C.k. at 07:18 PM - May 19, 2018 ( )

South-West monsoon expected to reach Kerala three days early

VINSON KURIAN   BUSINESS LINE

Early onset holds promise for farmers and the economy

THIRUVANANTHAPURAM, MAY 18

The South-West monsoon this year is expected to set in over Kerala on May 29, with a model error of four days, the India Met Department (IMD) announced on Friday. Last year, the seasonal rains had reached the State, the gateway for monsoon over mainland India, on May 30, exactly as the IMD had forecast.

The early onset of the monsoon, which is forecast to be normal this year, has brightened the prospects of farm and economic growth. The South-West monsoon, which delivers about 70 per cent of the country’s annual rainfall, is crucial for key kharif crops such as rice, cotton, oilseeds, pulses and sugarcane.

Pre-monsoon showers have been widespread, mainly in the South, where the sowing of crops such as rice, pulses and oilseeds has already commenced. Over half of the country’s farmlands are rainfed, and the South-West monsoon is critical.

Two arms

The monsoon approaches India and its territorial waters via two arms — the Bay of Bengal arm and the Arabian Sea arm. Both meet over Central India during June, the first full monsoon month.

The Bay arm makes the call first, over the Andaman & Nicobar Islands, 7-10 days before the Arabian Sea arm reaches Kerala on the South-West coast.

The IMD said on Friday the monsoon advances over the Andaman Sea normally around May 20, with a standard deviation of about one week.

Past data suggest that there is no association of the date of monsoon advance over the Andaman Sea, either with the date of monsoon onset over Kerala or with the seasonal monsoon rainfall over the country. Conditions are ‘likely to become favourable’ for the advance of monsoon into some parts of the Andaman Sea and the South-East Bay of Bengal around May 23, the IMD said.

Overall, the timeline is being pushed beyond May 20, largely due to the jump-start the Arabian Sea has managed to get this year — as it occasionally does, but not always with as much impact on the proceedings in the Bay as witnessed so far this year.

New Thread: Standard deduction subsumes medical reimbursement

From : Yatheendradas C.k. at 07:09 PM - May 19, 2018 ( )

Standard deduction subsumes medical reimbursement, transport allowance: How will this impact your salary structure?

The recently-notified Finance Act 2018, which is applicable from 1st April 2018, has done away with exemption for transport allowance and medical reimbursement for salaried employees. How will you get impacted now?

By: Sanjeev Sinha | Updated: May 19, 2018 1:00 PM   The Finacial Express

If you are a salaried employee working in any organisation, then most probably you would have by now received a mail from the HR department of your company that with the recent changes in the Finance Act, both medical reimbursement and transport allowance have become taxable with effect from 1st April 2018, and accordingly, both these allowances have been merged with your special allowance. This has left many employees wondering, will they now have to pay tax on these two allowances? If yes, then what about standard deduction? Has this already been taken into account by their employers while computing taxes or will they have to claim the tax so deducted by filing their income tax return?

However, before knowing the impact of these changes on you and your salary income, let us first take a look at what has changed.

What has changed?

According to tax experts, the recently-notified Finance Act 2018, which is applicable from 1st April 2018, has done away with exemption for transport allowance and medical reimbursement for salaried employees. In lieu of these, a standard deduction of Rs 40,000 has been introduced.

What does this mean?

Up to the preceding financial year (FY), an employee was allowed to structure his/her salary for claiming exemption for transport allowance of Rs 1,600 per month (Rs 19,200 per annum) and a medical expense reimbursement of Rs 15,000 per annum by selecting these components in the salary structuring sheet. Further, to claim medical reimbursement as non-taxable benefit, the employee had to submit original medical bills as proof to the HR department.

However, “with the introduction of amendments made in the Finance Act, 2018, transport allowance and medical reimbursement exemption are no more available. Hence, an employee would no longer be able to select these components as part of his/her salary structure,” says Akhil Chandna, Director, Grant Thornton India LLP.

Impact

Now a total of Rs 34,200 (i.e. Rs 19,200 and Rs 15,000) would be added to the special allowance component of the employee. This amount would be paid to the employee on monthly basis after deduction of applicable taxes.

“It should, however, be noted that while computing the payroll taxes, standard deduction of Rs 40,000, which has been introduced from FY 2018-19, would be given effect for. Hence, it will provide a relief of income up to Rs 5,800 per annum,” says Chandna.

Thus, it is wrong to believe that employers will deduct taxes on these two allowances now, which may have to be claimed later by the employees.

In fact, “the introduction of standard deduction has provided the salaried class additional benefit in tax by reducing their taxable income by Rs 5,800 besides reducing administrative hassles in maintaining documentary records to claim medical reimbursements,” says Ashok Shah, Partner, N.A. Shah Associates LLP.

What is more, differently-abled employees can claim both standard deduction of Rs 40,000 as well as transport allowance of Rs 38,400.

Organisations implement new provisions

These new provisions have already been implemented by most organisations across the country. For instance, Edelman India has merged these two allowances into the special allowance as, it says, retaining them without any corresponding tax benefits may create confusion in the minds of its employees. And the tax impact of the same has been fully offset by the standard deduction which has been brought back into the Finance Act.

As a result of this, there is no action required from the employees. Further, employees do not need to submit any claims under the medical reimbursement as they did earlier. “So far as standard deduction is concerned, it will be applied automatically on their taxable income by the Payroll System to the extent that they have taxable income. The employee does not need to take any action for the same. This has already been applied from April 2018 payroll in their Tax Computation for the Financial Year 2018-19,” says Pankaj Suri, Director of Human Resources, Edelman India.

What if organisations don’t follow this practice?

There are still apprehensions in the mind of some employees that excess tax will be deducted from their income now if their organisation deducts taxes without allowing the benefit of standard deduction.

Tax experts, therefore, say that employers need to understand the mechanism of tax deduction at source while providing the benefit of standard deduction to the employees. “The erstwhile transport allowance was a monthly allowance while exemption in respect of medical bills reimbursement was allowable subject to necessary documents being furnished to the employer. However, as the name suggests, the entire amount of the ‘standard deduction’ is required to be deducted from the estimated gross salary of the employee and TDS liability is to be worked out on the basis of the taxable income,” says Shah.

However, if employers were to deduct taxes without allowing the benefit of the entire standard deduction, a situation may arise where there is higher deduction of tax at source in earlier months, resulting in lower take home salary or in some cases, it might result in excess deduction of tax at source.

Also, “if any employer is still giving conveyance allowance or medical reimbursement – this will get taxable in the hands of the employee as per his income tax slab rates. Even if the employee submits proofs for this – it would still get taxable as the exemption has been removed with effect from Financial Year 2018-19 onwards,” says Karan Batra, Founder & CEO of CharteredClub.com.

Hopefully, employers will keep all these things in mind before deducting taxes from the salary income of their employees.

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