TV Vision Ltd: Buy

CMP: Rs.17.85

Market Cap: Rs.62.73 crore

Book Value: Rs.34.54

Industry P/E: 46.79

Introduction: The company started its broadcasting business in 2010 by launching Music and Youth

Channe "Mastiii". The bouquest of channels as grwon from one ion 2010 to five in 2015. The company expanded its footprint into Digital Media by launchng digital channel "Happii-Fi".After the scheme of amalgamation and arrangement, the broadcasting business of the of SAB Group is now being run by TV Vision Ltd. 

Shareholding Pattern: The promoters hold 37.63%, while the general public hold 62.37%. Among the general group, Central Bank of India hold 8.85% while insurance companies hold 0.58% of the shares of the company. Others who has a sizable holding in the company are:

#Assent Trading Pvt Ltd -- 6.26%

#Aranav Trading ad Investments Pvt Ltd -- 6.63%

#Kalash Trading and Investments Pvt ltd --- 5.72%

#Keynote Enterprises Pvt Ltd -- 5.44%

The corporates and large investors hold 52.69% leaving around 9.68% in the hands of the small investors. This gives low float and correspondingly increase the valuation of the share price. 

Financial: The company's financials got hit due to demonetization in Q2FY18 and Q3FY18.

However, speaking sequentially the financials of the company are showing some improvements. The total income of the company for Q3FY18 came as Rs.27.18 crore as against Rs.26.04 crore in Q2FY18 and Rs.44.60 crore in Q3FY17. 

The net loss of the company came down to Rs.3.6 crore in Q3FY18 as against Rs.4.68 crore in Q2FY18 and a net profit of Rs.2 crore in Q3FY18. Accordingly the EPS for Q3FY18 came to (-)Rs.1.03 from (-)Rs.1.34, showing marked improvement, sequentially. It is pertinent to mention here that the figures cannot be compared on Q-o-Q basis due to demonetization effect and hence sequential comparison seems to the best measure to asses its financial prowess.

Triggers: 

#The company is into broadcasting and content production. It is operating 5 (Five) TV channels namely, Mastiii, Dabangg, Dhamaal, Maiboli and Dillagiii. Mastiii, the Hindi Music TV Channel continues to  main the numero uno position in the target market and is holding position of the "Unchallenged No.1 Music & Channel for over one year".

#Dabangg, the Regional Entertainment Channel has continued its key position among its competitors. The Channel has added more regional flavour in its programming while focusing on increase in Bhojpuri content for the Channel. 

#Channel "Dhammal" positioned as youth and music channel for the state of Gujarat is showing steady performance while the regional Marathi Channel "Maiboli" has established itself as a strong player in the Marathi segment with its unique programming mix. It has strengthened its content offering by telecasting World TV Premier of famous Marathi movies. 

#"Dillagiii", the Channel which was launched with intention of catering to LCI regions, caters to large Indian population base across all age groups and is expected to improve its performance as the twins effects of demonetization and GST wanes off. And despite a challenging market, the improvement in financials on sequential basis is an indication of a turnaround and its ability to generate free Cash Flow. 

#The company has been closely monitoring the developments and are taking strategic steps to respond positively to the changing environments. It is also working on a blue print to make a bouquet of nine plus channels in variuos generes which includes existing bouquet of five channels and also having big plans to enter into the Hindi GEC space along with new regional channels and niche category channels. The company is well established in regional space with currently three region specific channels catering to different regions.

Conclusion: The company's broadcasting business is growing at a rapid pace. It currently operates 5 TV channels as mentioned above and with the success of the launched channels, TV Vision management intends to expand further in the broadcasting space and new age media. The requirement of funds is proposed to be met from both equity and debt from issuance of appropriate securities as defined in the resolutions and from both domestic and international markets. The funding would be an appropriate mix of equity and debt to meet with the objective of optimization of the cost as well as conservation of financial management. Let us elaborate a bit on its TV Channels:

a) MASTIII

“Mastiii” - India’s No.1 Music & Youth Channel from the network bouquet of SABGROUP, has

created a mark for itself and emerged as an un-paralleled and unchallenged #1 channel of the genre. The channel having a universal appeal caters to a variety of music lovers of various age groups becoming the most loved Music channel in India. Being the market leader, Mastiii has introduced and successfully implemented many first of its kind innovative properties, such as Mastiii Doubles which has gone to become the number 1 music show in its respective time band, Mastiii Star wars, a one of its kind battle in which Bollywood superstars fight it out with their hit songs hereby engaging the viewers not only through broadcast but also through social media. Everyday part of the channel has been very systematically planned to cater to every mood of the viewer during the day giving the audience a mix of peppy, romantic, retro and Bollywood blockbuster old and new Hindi songs.

b) DABANGG

“Dabangg” one of SABGROUP’s premier regional entertainment channels was launched to cater to the

audience of U.P., Bihar & Jharkhand. The Channel is widely distributed in the targeted territory. Bhakti Sagar a devotional show which has become the favorite amongst the viewers followed by back to back Bhojpuri movies & Hindi movies. With the vast movies library and exclusive World Television Premiers the channel is set to take the audiences entertainment quotient several notches higher. But the entertainment does not just stop there, having a change in programming during the festive periods the channel tries to give its audience a feel of the festivities right on their television screens.

c) MAIBOLI

Having spread its wings in the North SAB GROUP ventured out to capture Maharashtra with its

regional Marathi channel “Maiboli”, launched to cater and entertain the Maharashtrian audience. In the recent past the channel has gone ahead and given established market players a stiff competition. With shows such as Filmy Gappa which gives latest updates on what’s happening in the Marathi movie industry, Bolte Tare where the channel interacts with various Marathi celebs & one devotional programme named Amrut Manthan in the morning time band and multiple Marathi movies & Songs, the channel has become a complete family entertainer for the region.

d) DHAMAAL

“Dhamaal” is the youth focused regional channel for the territory of Gujarat. The programming of the channel includes music and "Gujju Bhai" gags along with shows such as “Dhamaal Ek Minut Ni” and “Dhamaal Youngsterni”. The channel is very well distributed in the targeted territory.

e) DILLAGIII

“Dillagiii” a dedicated TV channel for small towns & villages of India including towns with a population of less than one lakh (known as LC1 markets) across regions. Dillagiii is a family entertainment channel, believes in touching people's hearts through movies & gags by Raju. The Channel stands for the most invaluable things in life – love, family, fun & memories.

Thus, from the above discussion we find that the shareholders of the company has a great future ahead, if they buy the scrip of the company near the CMP of Rs.17.85 and keep holding, for short term targets of Rs.27-29 and medium term target of Rs.41-42. 

Market Pulse

Key benchmark indices remained firm in early afternoon trade as firmness in Asian stocks boosted sentiment. At 11.45 am the Sensex was seen at 34,381.79 up 225.84 points  or 0.66%, while the  Nifty was seen at 10,570.10 up 69.20 or 0.66%.

Among secondary indices, the S&P BSE Mid-Cap index rose 0.24%. The S&P BSE Small-Cap index gained 0.01%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was turned negative from positive in mid-morning trade. On the BSE, 1,278 shares fell and 1,226 shares rose. A total of 109 shares were unchanged.

IT stocks gained. Tech Mahindra was up 0.51%, HCL Technologies 0.62%, Infosys 2/39%, and TCS 0.57%. However, Wipro fell 0.34%.

Telecom stocks were mixed. Bharti Airtel fell 0.16%, Tata Teleservices (Maharashtra) 0.15%, and Reliance Communications dropped 0.85%. Idea Cellular gained 0.47% and MTNL rose 0.2%.

Punjab National Bank skidded 5.9% to Rs 137.20, with the stock extending yesterday's losses triggered by the bank detecting a $1771.69 million fraud at a single branch in Mumbai. The bank made the announcement before trading hours yesterday, 14 February 2018. Shares of PNB slumped 9.81% to settle at Rs 145.80 yesterday, 14 February 2018.

The bank had announced that it has detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions, other banks appear to have advanced money to these customers abroad. In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions. The quantum of such transactions is $1771.69 million (approximately). The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank said it is committed to clean and transparent banking.

On the macro front back home, the government will announce inflation data based on wholesale price index (WPI) for January 2018 today, 15 February 2018. Wholesale prices in India rose by 3.58% year-on-year in December of 2017.

Overseas, Asian stocks gained taking cues from the rally on Wall Street overnight following the release of stronger-than-expected US inflation data. The consumer price index in US rose 0.5% last month, topping the forecast. Other economic data released overnight included US retail sales for the month of January, which missed expectations. Retail sales decreased 0.3% last month.

It is a shortened week for greater China markets, with mainland China markets remaining closed from 15 to 21 February 2018 and Hong Kong markets shut from 16 to 19 February 2018 for the Lunar New Year. Markets in South Korea, Taiwan and Vietnam are closed today for the Lunar New Year holiday.

Today's Calls:

#TV Vision Ltd (Rs.19) seems to have bottomed out around the current market price. The company is generating good revenues from a bouquet of 5 channels. It is expected to cut its expenditure in future, which will help improve its bottomline.  If you look at the December, '18 quarter results you would find that it has a profit of around Rs.16 lakhs before the depreciation. Demonetization had a very bad effect on its revenues, however the things are improving for better, according to my sources, who refused to be quoted. It is from the famous SAB TV Group and  hence there is no much worry regarding its pedigree. We can look forward for a short term target of Rs.29, within the next couple of months.

#3i Infotech Ltd is consolidating around the current price ranges of Rs.6-7, before the next level  of upmove which will take it around Rs.12-14. This is a turnaround company and is expected to give good returns over a period. 

#HDIL (Rs.52.70) has come up with decent set of numbers for the Q3FY18, when on standalone basis the net profit came at Rs.19.18 crore (Rs.13.89). Therefore, it somewhat proves that whatever be the general condition of the real estate market, big players will manages to do well going forward too; because housing is a basic need of human beings. I don't think that the shares will close below Rs.53 today.

#Buy Havells Ltd on declines at around Rs.521, SL: Rs.511,  T: Rs.541 on  T+2 basis. This is a pure chart based call.

#Important: There is a general sell off in the market, especially in the mid and small cap space, after PNB Ltd's scam hit the sentiments of the bulls in the Indian bourses. This is the biggest one after Vyapam scam, which rocked the NDA's boat earlier. And this one too will definitely give sleepless nights to Narendra Modi & Co in the days to come. 
Therefore, don't put fresh money in the stocks. If you have invested fresh fresh funds today, then sell out the day's position and stay with cash. The markets could fall further, as I feel scam-stars might have imitated PNB's methodology, in other banks too, in order to defraud their respective banks. Till the situation in Dalal Street becomes more fluid, my suggestion would be: not venture in this terrain. The Premium Members were already alerted of this possible fall-out this scam. 

~with inputs from Capital Market - Live News

Videocon Industries Ltd: Few Words

Photo: Mydigitallife.com

The wireless operations of Videocon Industries Ltd (Rs.18.90) failed and Rs.22,000-crore plus oil assets are yet to bring in any significant revenue, leaving the group buried under debt. 

Videocon Industries filed a writ petition in Bombay High Court seeking stay on NCLT proceedings initiated against it by RBI under IBC, Sources, say the company had proposed to raise Rs.10,000 crore by sale of its land assets in Chennai, Bangalore, Kolkata and Mumbai and raise another Rs.4,000 crore every year to pare off the debt.

According to the media reports more than half of it is dollar- denominated, borrowed from Standard Chartered, Bank of America Merrill Lynch and Deutsche Bank, Venugopal Dhoot, chairman and managing director of Videocon Industries, said in a phone interview with BloombergQuint.

Since, the INR is appreciating as against the USD, this could be a little solace for the company, while paying the overseas dues.

Videocon, which traces its origins to 1950s, started making televisions and appliances in late 1980s. As India opened up its economy, it diversified into oil and gas in 1994 by signing a production sharing contract for the RAVVA oil and gas field off Andhra Pradesh along India’s east coast.

The company later acquired interests in oilfields in countries like Oman, Indonesia and Brazil, Mozambique and East Timor, running overseas operations through a Cayman Islands subsidiary, Videocon Hydrocarbon Holdings Ltd.

Videocon Industries Ltd offers range of products in televisions, washing machines, air-conditioners, refrigerators, audio products, home theatre systems and microwave ovens. The company operates in four segments: Consumer Electronics and Home Appliances, Crude Oil and Natural Gas, Telecommunications, and Power.

The company is engaged in manufacture, assemble and distribute a range of consumer electronics, products and home appliances, including finished goods, such as television, home entertainment systems, refrigerators, washing machines, air conditioners and other small household appliances and components, such as glass shell, compressors and motors.

The Company is developing the Pipavav power project through a wholly owned subsidiary Pipavav Energy Pvt Ltd. The company operates the global system for mobile communications mobile services through Videocon Telecommunications Ltd.

Now there are few points which I thought to highlight here:

#The crude oil prices was steadily rising up piggybacking on weak USD, before moving sideways.  It seems that, in the short run at least, U.S. shale has killed off the oil price rally, which saw WTI move from $50 per barrel in October to the mid-$60s per barrel by January. Brent saw a similar jump from the mid-$50s to $70.
It is important to mention here that, typically, a weakening dollar pushes up oil prices, and the rapid run up in prices over the last few months occurred not coincidentally at a time when the dollar posted a steep decline. But the greenback has clawed back gains, particularly over the last week, with expectations of rising interest rates.
Hence, in the short run, though it seems that the Oil bears will be back as U.S. shale output is skyrocketing and there could be short-term liquidation of bullish bets from hedge funds and other money managers, after building up a net-long positioning that became overstretched adding up the losses for WTI and Brent, but on the flip side a price correction doesn’t mean that the market will settle in at lower prices for the long haul. Demand is rising and OPEC will likely maintain high levels of compliance with its production limits.
Moreover, the severe cutbacks in upstream spending that began when oil prices initially collapsed in 2014 have yet to really be felt in terms of supply. Large-scale projects that received FIDs before the market downturn were carried through to completion, allowing new supply to come onto the market even as the industry made sharp spending cutbacks. But that pipeline of projects is now on the verge of drying up, which raises questions about the availability of supply next year and beyond.
Earlier this month, Goldman joined other major banks in revising its oil price projections considerably, saying it expected Brent crude to break the US$80 barrier within the next six months. Goldman sees the price of Brent reaching $75 per barrel within three months, lifting its short-term oil price projection from the previous $62 forecast.
Amrita Sen, chief oil analyst at Energy Aspects, said on Bloomberg TV: “I do think there is a potential for spike … We’ve seen a huge amount of shale production growth, 1.5 million barrels per day, year-on-year in Q417, and still we are drawing stocks everywhere. That just shows you that we aren’t adding enough supplies elsewhere and demand growth is very high.” Amrita Sen says the market won’t go back to the days of $100-plus, but “it could be a spike up to $90-plus in 2019.

Hence, we can look forward for a good pricing of the OIL ASSETS of Videocon Industries Ltd. 

#As the Indian economy starts to do well post demonetization and implementation of the GST, there could be a phenomenal spurt in demand in the consumer consumer electronics space, which could push up its bottomline at a more faster rate than expected.

#E-commerce in India is at a very early stage. It would require a lot of investments to build the infrastructure that allows anyone, anywhere in India to find and buy anything. Once that infrastructure is built there could give a great lift to the sales of established consumer durable companies, from online buying community too, apart from the business from other sources.

#The government of India recently hiked import duty on smartphones, television sets, microwave, LED lamps and some other electronic items in a bid to protect domestic manufacturers. Customs duty on television sets has been doubled to 20% as also on LED lamps. "This is a significant step as it will boost the domestic manufacturing industry and give a fillip to the government's Make in India initiative," Videocon Chief Manufacturing Officer Abhijit Kotnis said.

Hence, I would suggest the RISK TAKING INVESTORS, to add few of the scrip of Videocon Industries Ltd, in your portfolio, following the cannons of value investing, for 9-12 months time frame, to get good returns from here.

Bibliography:
(i) Oilprice.com

(ii) Videocon Industries Ltd

Market Mantra

Key benchmark indices held firm after moving in a tight range in positive terrain in mid-morning trade. At around 12.12 pm, the BSE Sensex was seen trading at 34,217.37 up 211.61 points or 0.62%, while the Nifty was seen at 10,514.40 up 59.45  points or 0.57%. Firmness in Asian stocks supported gains on the bourses.

The market opened higher on firm global cues. Key indices held steady in morning trade after paring initial gains. Stocks held firm in mid-morning trade.

Among secondary indices, the S&P BSE Mid-Cap index rose 1.42%. The S&P BSE Small-Cap index gained 1.69%. Both these indices outperformed the Sensex.

The breadth, indicating the overall health of the market, was quite strong. There were almost four gainers for every loser. On the BSE, 2,006 shares rose and 542 shares dropped. A total of 110 shares were unchanged.

Cement stocks rebounded. Shree Cement rose 0.06%, Ambuja Cements 0.74%, ACC 0.39% and UltraTech Cement rose 0.61%.

Grasim Industries advanced 1.45%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

Telecom stocks also gained in firm market. Bharti Airtel rose 0.72%, Tata Teleservices (Maharashtra) 1.54%, Reliance Communications 1.85% and Idea Cellular gained 1.13%.

Tata Steel rose 3.83% after consolidated net profit surged 389.83% to Rs.1135.92 crore on 20.05% rise in net sales to Rs.33099.95 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours on Friday, 9 February 2018.

Consolidated pre-exceptional profit before tax (PBT) from continuing operations rose 221% to Rs.3210 crore in Q3 December 2017 over Q3 December 2016. However, exceptional charges of Rs.1116 crore arising mainly from certain demands and claims from regulatory authorities relating to mining operations, dented profits.

On the macroeconomic data front, the government will announce inflation data based on consumer price index (CPI) for January 2018 after market hours today, 12 February 2018. Consumer prices rose 5.21% in December 2017 over December 2016.

The government will also announce industrial production data for December 2017 after market hours today, 12 February 2018. India's industrial production rose sharply by 8.4% in November 2017 over November 2016.

Meanwhile, the provisional figures of direct tax collections up to January 2018 showed that net collections are at Rs.6.95 lakh crore which is 19.3% higher than the net collections for the corresponding period of last year. The net direct tax collections represent 69.2% of the revised estimates of direct taxes for FY 2018 (Rs.10.05 lakh crore). Gross collections (before adjusting for refunds) have increased by 13.3% to Rs.8.21 lakh crore during April 2017 to January 2018. Refunds amounting to Rs.1.26 lakh crore have been issued during April 2017 to January 2018.

Overseas, Asian stocks gained after a late-day rally on Wall Street on Friday, 9 February 2018, as investors fretted about the risks from looming US inflation data. Japanese markets are closed today in observance of a public holiday.

Trading in US index futures indicated that the Dow could jump 141 points at the open today, 12 February 2018.

Today's Calls:

#Buy the shares of TV Vision Ltd at around Rs..20.30 for targets of Rs.31-32. This stock is from the Sri Adhikari Brothers (SAB) group and is the company's broadcasting business arm. SABGROUP, a pioneer in Indian media and entertainment with its presence over three decades, has been the founder of the leading comedy channel SAB TV and has been successful in creating a multi-genre broadcast network encompassing five leading channels viz. Mastiii - India’s No. 1 music and youth channel, Dabangg - Focusing on Hindi heartland of UP, Bihar and Jharkhand, Maiboli – the leading Marathi entertainment channel, Dillagi – a channel dedicated to rural India and Dhamaal Gujarat – a music and youth channel for Gujarat.

#Buy the shares of Sri Adhikari Brothers Television Network Ltd at around Rs.24-25, for short term targets of Rs.33-35. There were recent media reports that Sri Adhikari Brothers Television Network Limited, TV Vision Limited and its other associates concern, and Pantel Technologies Pvt. Limited, who have recently acquired the Reliance Communications’ DTH arm, Reliance BIG TV Limited, have entered into an understanding that they will jointly create a bouquet of over 20 channels comprising of diverse genres such as entertainment, kids, infotainment, mythological, movies and varieties of the music channel.

#The shares of Housing Development & Infrastructure Ltd (Rs.54) has started to move slowly towards the next targets of Rs.57-59. The company has a huge land bank, apart from its projects in affordable housing sector. I am looking at a price of Rs.92 within the next few months. Stay invested.

#BUY CESC Ltd Futures at around Rs.1038-1039, SL: Rs.1019, for a short term target of  Rs.1064. The medium term investors can keep holding with a SL of Rs.970. 

CESC Ltd is expecting its demerger process to be under way, post the final hearing of the NCLT in March. The effective date of demerger, however, will be in October.

As per the proposed plan, the RP Sanjiv Goenka Group flagship, CESC Ltd will demerge its businesses in four different companies — power generation, electricity distribution, retail (Spencer’s Retail) and other ventures.

CESC will handle the electricity distribution business of the Group. According to Sanjiv Goenka, Chairman, CESC has already got the necessary regulatory and shareholder clearances. “The final hearing is due at NCLT in March. All other clearances are in place,” he told reporters during a press conference.

#Those who are holding the shares of Videocon Industries Ltd (Rs.19.20) can look for short term target of Rs.27. The company has oil assets in Africa and elsewhere, which it is thinking to offset against its debt.

~~with inputs from Capital Market - Live News....

12-Feb-18: Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 6.50 points at the opening bell.

Overseas, Asian stocks gained after a late-day rally on Wall Street on Friday, 9 February 2018, as investors fretted about the risks from looming US inflation data. Japanese markets are closed today in observance of a public holiday.

On the commodities front, oil prices were steady after sinking on Friday for a sixth straight day.

Among corporate earnings of prominent companies back home, Bank of India, Britannia Industries and GAIL (India) will announce October-December 2017 earnings today, 12 February 2018.

On a consolidated basis, net profit of Coal India rose 4.22% to Rs 3005.02 crore on 2.52% decline in total income to Rs 22484.14 crore in Q3 December 2017 over Q3 December 2016. The result was announced on Saturday, 10 February 2018.

State Bank of India (SBI) reported net loss of Rs 2416.37 crore in Q3 December 2017 as against net profit of Rs 2610 crore in Q3 December 2016. Total income rose 17.4% to Rs 62887.06 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours on Friday, 9 February 2018.

Net profit of Mahindra & Mahindra (M&M) rose 12.50% to Rs 1215.91 crore on 4.57% rise in net sales to Rs 11577.78 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours on Friday, 9 February 2018.

Net profit of ONGC rose 15.22% to Rs 5014.67 crore on 14.90% rise in net sales to Rs 22995.88 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours on Friday, 9 February 2018.

On the macro front, the government will announce inflation data based on consumer price index (CPI) for January 2018 after market hours today, 12 February 2018. Consumer prices in India increased 5.21% year-on-year in December of 2017.

The government will announce industrial production data for December 2017 today, 12 February 2018. India's industrial production rose sharply by 8.4% year-on-year in November 2017.

Meanwhile, the stock market closed the last trading session of the week with strong losses on Friday, 9 February 2018, weighed by weak global stocks. The Sensex fell 407.40 points or 1.18% to settle at 34,005.76, its lowest closing level since 4 January 2018.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 1351.70 crore on Friday, 9 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 588.42 crore on Friday, 9 February 2018, as per provisional data.

The Indian stock market will remain shut tomorrow, 13 February 2018, on account of Mahashivratri.

Note: Many of the small investors (whose portfolio size is below Rs.1 lakh) have sent me mails, asking for DISCOUNTS on my Premium Information Service (Current Price Tag: Rs.18000 per year), if they are eligible. Yes, you are eligible, as this blog is and my new scheme is dedicated to SMALL INVESTORS only, so that I can assist you with my few decade of experience. 
It is not that, I am always infallible or is always right regarding my takes on the market, but then few decades of experience in stock market counts and hence I perhaps make less mistakes than the new comers or novices. 
Moreover, I feel investing/trading in stock market is a serious business and it hence there is no place of "Chalta Hai" (Casual) attitude here or it CANNOT be a PART-TIME thing to get good returns. You have to devote your time and energy to get scintillating returns or else one bad decision can rob off all your efforts.....if you do not have too much time or you are short of source based information (this is a must as it is  very difficult to make money without getting to know before hand what is going inside the company through your sources in Industry) then you need to take the services of professionals in this field/space.
Also, if you are trading through my associated brokerage house: BMA Wealth Creators Ltd, with a portfolio size of more than Rs.2 lakhs, then you would get my assistance along with the tips from the brokerage house free of charge.
Anyway, please give me some time to reply to your individual mails, because of the sheer number of such mails hitting my desk during the last few days. But don't worry you would get my reply at the earliest. If you do not receive my reply within two days, then kindly re-sent your request at: suman2005s@rediffmail.com or sumanm2007s@gmail.com (send in this e-mail address if and only if you do not get reply within a couple of days through suman2005s@rediffmail.com).  

~With inputs from Capital Market -- Live News

Pre-Session: Weak Opening on the Cards

09-Feb-18: Market may open sharply lower on weak global cues. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 216.50 points at the opening bell.

Overseas, Asian stocks tumbled in early trade after US stocks plummeted once again in the last session. China inflation as represented by the consumer price index (CPI) rose 0.6% month-on-month in January, well above the previous month's print of 0.3%, data released today, 9 February 2018 showed.

US stocks fell sharply yesterday, 8 February 2018 as strong earnings and economic data were not enough to quell investors' jitters on Wall Street about higher interest rates.

US initial jobless claims decreased 9,000 to a seasonally adjusted 221,000 for the week ended 3 February, the Labor Department said yesterday, 8 February 2018. The second straight weekly decline in claims pointed to strong job growth momentum.

In the Europe, the Bank of England (BoE) yesterday, 8 February 2018 said it is likely to raise interest rates earlier and faster than previously expected to damp the effects of a stronger global economy on UK inflation. All nine members of the bank's Monetary Policy Committee agreed a statement that the central bank was no longer willing to tolerate inflation above its 2% target over the next three years, reports suggested.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 2297.09 crore yesterday, 8 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 2373.59 crore yesterday, 8 February 2018, as per provisional data.

Among prominent companies, BPCL, HPCL, M&M, ONGC, SBI and Tata Steel are scheduled to announce Q3 December 2017 results today, 9 February 2018.

The stock market registered modest gains yesterday, 8 February 2018, as bargain hunting emerged on the bourses after seven straight sessions of losses. The Sensex had risen 330.45 points or 0.97% to settle at 34,413.16, its highest closing level since 5 February 2018.

~~Powered by Capital Market - Live News....

WINNING STROKES

The stock market registered modest gains as bargain hunting emerged on the bourses after seven straight sessions of losses. The barometer index, the S&P BSE Sensex, rose 330.45 points or 0.97% at 34,413.16. The Nifty 50 index advanced 100.15 points or 0.96% at 10,576.85. Pharma stocks advanced. Cement major ACC surged after reporting strong Q4 results. Bhel advanced after strong Q3 earnings.

Key indices opened higher and extended gains in mid-morning trade. Later, indices traded within a narrow range with strong gains till afternoon trade. Indices trimmed some gains in mid-afternoon trade and closed with modest gains with a bit of volatility seen in the last hour of trading.

Stocks advanced as bargain hunting emerged after seven straight sessions of sell-off in the domestic equities in the wake of a combination of domestic and global factors. Lesser hawkish tone of the Reserve Bank of India (RBI) in its monetary policy meeting concluded yesterday, 7 February 2018, also supported the gains on the bourses. The central bank had kept key policy rates on hold, reiterating its intention to keep an eye on the inflation figures going forward and to support growth.

Earlier, the key indices had declined for seven sessions in a row after the Government announced re-introduction of long term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% in Budget 2018, surging interest rates on sovereign debt in US, and amid rising global crude oil and commodity prices.

Overseas, European stocks edged lower as investors waded through the latest batch of corporate earnings, ahead of a central bank decision in the UK. Asian stocks ended on a mixed note. China's trade surplus shrank in January on huge imports surge, data released today, 8 February 2018 showed. Trade surplus for January, in Yuan terms, came in at CNY 135.80 billion.

US stocks declined yesterday, 7 February 2018, after trading in a wide range again, as interest rates climbed back toward multi-year highs.

Among secondary indices, the S&P BSE Mid-Cap index rose 1.82%. The S&P BSE Small-Cap index advanced 2.25%. Both these indices outperformed the Sensex.

The breadth, indicating the overall health of the market, was quite strong. There were more than three gainers for every loser on BSE. 2,172 shares advanced and 640 shares declined. A total of 118 shares were unchanged.

The total turnover on BSE amounted to Rs 5547.07 crore, compared with the turnover of Rs 4395.53 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Healthcare index (up 2.91%), the S&P BSE Realty index (up 2.51%), the S&P BSE Basic Materials index (up 2.48%), the S&P BSE Consumer Discretionary Goods & Services index (up 1.63%), the S&P BSE Industrials index (up 1.45%), the S&P BSE Telecom index (up 1.45%), the S&P BSE Capital Goods index (up 1.44%), the S&P BSE Teck index (up 1.41%), the S&P BSE IT index (up 1.40%), the S&P BSE Metal index (up 1.35%), the S&P BSE Consumer Durables index (up 1.32%), the S&P BSE Finance index (up 1.28%), the S&P BSE Auto index (up 1.17%) and the S&P BSE Bankex (up 1.12%), outperformed the Sensex. The S&P BSE Energy index (up 0.45%), the S&P BSE FMCG index (up 0.36%), the S&P BSE Power index (up 0.31%), the S&P BSE Utilities index (up 0.30%) and the S&P BSE Oil & Gas index (down 0.25%), underperformed the Sensex.

Banks stocks advanced. Among public sector banks, IDBI Bank (up 6.31%), Indian Bank (up 3.18%), State Bank of India (up 2.97%), Canara Bank (up 2.96%), Allahabad Bank (up 2.42%), Andhra Bank (up 2.27%), Syndicate Bank (up 2.19%), Corporation Bank (up 2.12%), Bank of Baroda (up 1.56%), Punjab National Bank (up 1.50%), Union Bank of India (up 1.50%), Bank of India (up 1.21%), United Bank of India (up 0.98%), Bank of Maharashtra (up 0.79%) and Dena Bank (up 0.66%), edged higher. UCO Bank (down 0.17%), Central Bank of India (down 0.52%), Vijaya Bank (down 1.15%) and Punjab & Sind Bank (down 2.01%), edged lower.

Among private banks, City Union Bank (up 3.95%), Axis Bank (up 1.75%), Federal Bank (up 1.39%), Kotak Mahindra Bank (up 1.33%), RBL Bank (up 1.08%), ICICI Bank (up 0.69%), IndusInd Bank (up 0.68%), Yes Bank (up 0.56%) and HDFC Bank (up 0.46%), edged higher.

Pharma stocks advanced. Cipla (up 7.83%), Sun Pharmaceutical Industries (up 6.32%), Dr Reddy's Laboratories (up 3.18%), Wockhardt (up 2.93%), Strides Shasun (up 2.80%), IPCA Laboratories (up 2.59%), Piramal Enterprises (up 2.49%), Divi's Laboratories (up 2.19%), Cadila Healthcare (up 2.13%), Glenmark Pharmaceuticals (up 1.47%), Alkem Laboratories (up 1.41%) and GlaxoSmithKline Pharmaceuticals (up 0.49%), edged higher.

On the macro front, the Reserve Bank of India (RBI), in a notification dated 7 February 2018, announced relief measures for micro, small and medium enterprises (MSMEs) registered under Goods and Services Tax (GST). Presently, banks and non-banking finance companies (NBFCs) in India generally classify a loan account as non-performing asset (NPA) based on 90 day and 120 day delinquency norms, respectively. The formalisation of business through registration under GST had adversely impacted the cash flows of the smaller entities during the transition phase with consequent difficulties in meeting their repayment obligations to banks and NBFCs.

As a measure of support to these entities in their transition to a formalised business environment, it has been decided that the exposure of banks and NBFCs to a borrower classified as MSME under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, shall continue to be classified as a standard asset in the books of banks and NBFCs, subject to a set of conditions, the central bank said.

#As expected the Indian markets bounced back, after a long hiatus. Nifty did got support around 10400 througout the day. The next targets for the Nifty spot comes around 10630 and 107286 on the upside. However, I feel the action will now be seen in the badly beaten small and mid cap sectors. Remain invested and average wherever necessary; but don't average every scrip.

#NDTV Ltd today hit the BUYER FREEZE in the mid afternoon trade at Rs.45. Yesterday, the traders and investors were suggested a buy on the counter on view of increasing chances of UPA returning  to power in 2019. However, the stock has some resistance around Rs.45-46.5 ranges which it needs to cross with good volume for the next target of Rs.51.

#The stock of 3i Infotech Ltd (Rs.6.35) today moved up with good volume, with rising RSI, indicating further bullishness in the counter. The investors should do well to accumulate the scrip in every decline and buy with long term targets of Rs.50 and Rs.100. You need to just buy and hold, like your fixed deposits. 

#The scrip of HDIL today moved up from the oversold positions with reasonable volume to close just below the resistance zone of Rs.52.60-52.70. The next targets for the scrip are Rs.59 and Rs.65, which it will easily reach during the next few trading sessions. HDIL is not a company but a Real Estate Empire, with a land bank of around 20 crore sq.ft in Mumbai Metropolitan Region, where the land cost is a major part of the total cost of construction. Even if we take a modest value of Rs.1500 per sq.ft of land in MMR, the land bank valuation comes to around Rs.30,000 crore, which will always give some cushion against debt. 

#The share of Urja Global Ltd today hit another lower circuits to close at Rs.7.45 in the BSE. The stock has been hitting the Lower Circuits, since my sell call at around Rs.11.30. I feel any price of this Re.1 face value scrip, above Rs.2-3 is unjustifiable. 

#The stock of GVK Power & Infrastructure Ltd today hit the buyer freeze at Rs.196.50 (on Rs.10 face value), probably due to "Hero Worship" formula, when the company has over the years amassed ~Rs.25,000 crore debt, raising its debt-to-market cap to as high as 13. I am not understanding the reasons to buy this Re.1 face value scrip at around Rs.19.6, when there are 100s of stocks, which  are looking screaming buys. 

In its annual report, the company said it had delayed payment of loan and interest and certain loan accounts have been classified non-performing assets by banks. 

Anyway good luck to those who buys JUNKS at such a high price because a fund manager has bought the same. Will the fund manager tell you when he exits the scrip, distributing the shares of the company on to your hands? 

Did Rakesh Jhunjhunwala ever whisper into your ears......before EXITING the companies like Orchid Chemicals and Pharmaceutical Ltd (now Orchid Pharma Ltd; CMP: Rs.17.85) or Hindustan Oil Exploration Ltd (Rs.121.30)? 

Moreover, the Financial/Business TV  Channels will never inform you why Rakesh Jhunjhunwala's Viceroy Hotels Ltd (Rs.16.15) failed to perform in the bourses, but will generally shout, about his investments in Prakash Industries Ltd (Rs.205.60) or Titan Company Ltd (Rs.800.65)....
This is how the whole system of stock market works, in collusion with media......Huh!! As a parting note, I would  like to point out that: I also recommended Prakash Industries Ltd at around Rs.41-42, but the media will always attribute the gains in the scrip price to RJ only......LOL!!

#My recommended Energy Development Ltd, an Amar Singh-Jaya Prada venture, at around Rs,17-18, today hit the upper circuits at around Rs.24.55.  The immediate targets for the scrip are Rs.27-29, which I feel will be achieved very shortly. 

#I have few scrips which could give good returns over a period. These are the scrips which are infront of your eyes but you might not find the reasons to invest in them, till they start hitting the upper circuits, due to hidden valuations. If anyone is willing to invest around Rs.3-5 lakhs in those scrips please do let me know. You will get the 1st mover advantage and naturally the gains will be higher. This is different from the Premium Service, which I run..

Also, small investors/traders can join my information service at a discounted rate or my associated brokerage house: BMA Wealth Creators Ltd to stay ahead of others. Exiting a stock is always very difficult than buying a scrip and hence expert opinion matters.

~~with inputs from Capital Market - Live News..

WINNING STROKES

Yesterday, the Indian stock market closed the lackluster trading session with modest losses. The barometer index, the S&P BSE Sensex, fell 113.23 points or 0.33% to settle at 34,082.71. The Nifty 50 index fell 21.55 points or 0.21% to settle at 10,476.70. Market opened with modest to strong gains on bargain hunting after a recent slump, but failed to hold-on to the gains as the session progressed. Mixed Asian stocks also hampered investors' risk appetite as domestic indices struggled for direction. The Sensex and the Nifty, both hit their lowest closing levels in more than one month.

Among key developments, the Reserve Bank of India (RBI), at the conclusion of its two-day Monetary Policy Committee (MPC) meeting today, 7 February 2018, left the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6%, on the expected lines. Consequently, the reverse repo rate under the LAF remains at 5.75%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25%.

The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

Overseas, European stocks edged higher after recent global markets turmoil. Asian stocks closed mixed. US stocks closed higher on 6 February 2018, albeit with wild swings witnessed in the day's trading, after two huge sell-offs in a row. The wild moves were attributed to a combination of factors like interest-rate fears, computer-driven trading and the obscure volatility funds that use leverage.

Among secondary indices, the S&P BSE Mid-Cap index rose 0.43%. The S&P BSE Small-Cap index rose 1.95%. Both these indices outperformed the Sensex.

The broad market depicted strength. There were more than two gainers against every loser on the BSE. 1,988 shares advanced and 786 shares declined. A total of 94 shares were unchanged.

The total turnover on BSE amounted to Rs 4382.22 crore, compared with the turnover of Rs 5349.37 crore registered during the previous trading session.

Among private sector banks, HDFC Bank (down 1.37%), Axis Bank (down 0.96%), IndusInd Bank (down 0.52%) and City Union Bank (down 0.19%), edged lower. Kotak Mahindra Bank (up 0.03%), Federal Bank (up 0.38%), ICICI Bank (up 0.45%) and RBL Bank (up 1.11%), edged higher.

Most realty stocks advanced after the RBI kept the policy rates unchanged. Unitech (up 4.24%), Godrej Properties (up 3.94%), Anant Raj (up 2.50%), Phoenix Mills (up 2.19%), Indiabulls Real Estate (up 2.11%), Oberoi Realty (up 2%), Sobha (up 1.80%), Housing Development and Infrastructure (HDIL) (up 1.68%), Peninsula Land (up 1.13%), Prestige Estates Projects (up 0.62%), Parsvnath Developers (up 0.24%), DLF (up 0.13%) and Omaxe (up 0.13%), edged higher. Mahindra Lifespace Developers (down 0.75%), Sunteck Realty (down 2.57%) and D B Realty (down 4.98%), edged lower.

Purchases of both residential and commercial property are largely driven by finance.

The introduction of the long term capital gains (LTCG) tax on equities exceeding Rs.1 lakh at 10% in the Budget 2018, worries of higher retail inflation and subsequent hike in interest rates by the central bank going forward amid slipping fiscal targets, increase in minimum support prices (MSPs) for agriculture crops, rising global crude oil and commodity prices coupled with the concerns of inflation going northwards in the advanced economies like US, especially after a stronger-than-expected jobs report from US for the month of January, whacked investors' sentiment across the globe.

#3i Infotech Ltd touched Rs. how it could not cross the resistance zone of Rs.6.3-6.8. However,  Golden Cross has occurred on EOD Chart and the traders can expect the next targets of Rs.6.90 and Rs.7.30 within a short term. Those who have purchased at higher levels should average it, to reap significant gains in the coming days.

#A couple of days back, my associated brokerage house: BMA Wealth Creators Ltd gave buy call on Nifty CE10700, at Rs.48-49, when it zoomed to around Rs.108.90 intra-day.  Yesterday also it opened at Rs.108, but later settled at Rs.59.50, still much higher than the buy price. 

Join my associated Brokerage House, to get such scintillating Calls and stay ahead  of others. Demonetization is gone and is  history, and if you had made losses due to Narendra Modi's earlier stupidity, then this is the best chance to make up for the gains. 

Don't bother much about brokerage when higher gains can be made, by investing in some of the company's calls. Some people are too bothered with brokerage, that is why they end up slow trading platform and zero help in terms of research reports and intraday helps. This is a PENNY WISE, POUND FOOLISH FORMULA, as I have always advocated for a FULL brokerage platform rather than all those Budget brokers; the latter is best suited for experts only or who have multiple demat accounts.  

#I had earlier given a SELL call on the "Marwari" (Rajasthan based) company Urja Global Ltd, around Rs.11.30, when the speculators and punters were madly after this junk. The stock has already corrected by more than 30% from there and closed at Rs.7.84 on the NSE. The scrip of Urja Global Ltd has broken a major support at around Rs.8.4 and the next downward targets are Rs.7.40 and Rs.6.50. 

This fundamentally wear stock with FACE VALUE of Re.1, rose up insanely due to operators who made rosy videos about its ELECTRIC VEHICLE story and posted on the YouTube; which fooled the gullible traders and investors of DALAL STREET. But when there is no infrastructure at present for such vehicles both in Asia and Africa, where the company is touted to have huge future markets, it is just too much illusory and highly speculative to buy this stock at any price above Rs.2-3 (Rs.20-30 on Rs.10, Face Value). Stay away!!

#I had given a SELL on the speculative scrip, GVK Power and Infrastructure Ltd near its recent high of around Rs.27, when a south based BULL spun BULLISH stories about the company laden with too much debt and still has no clue as how to cut  it to manageable size. The scrip has already corrected by around 30%from there and closed at Rs.18.70 in the NSE, yesterday. I feel if the share breaks the support at around Rs.18.4, it can go down to Rs.16 and Rs.13.5. Stay away!!

#Those who had not booked profit in NDTV Ltd, can average the scrip at around Rs.42-43 or take fresh positions. With the chance of UPA coming to power in 2019, increasing everyday, due to some thoughtless policy blunders of the current NDA Government; this stock could become GOLDEN GOOSE of tomorrow. Stay invested!!

#Regarding Nifty, I would say as long as 104000 holds, the bulls will not have to worry much. The application of LTCG Tax, introduced by the FM will  not hurt much of the small investor community most of whom do short term trading and is already under the STCG Tax net. The LTCG TAX, which attempts to generate additional finance for the NDA government to boost up its rickety coffers and also to check the markets going too much CRAZY will hurt mostly the FIIs and Large Mutual Fund/ Share holders, like Rakeshesh Jhunhunwala or Ramesh Damani or Porinju Veliyath. The FIIs have been on a sell mode since the budget day and yesterday also they hawked shares worth Rs.1022.5 crores while the DIIs bought shares of value Rs.461.19 crores; as small mutual holders will not be affected much. Therefore, too much fear on this front is uncalled for.....and the market will slowly adjust to the new reality, as the government goes on spending mode during the next few months to give a forward kick to the depleting demand, following Demonetization and hurried implementation of the GST.

#I  have few SCRIPS which can give good returns over a period. Those who are willing to invest at around Rs.2 lakhs and share a part of the profit can send me a mail at; suman2005s@rediffmail.com or PM through my Facebook Profile. I feel it would NOT be an exaggeration to say here that: it be very difficult to make money on a consistent basis by simply following this blog - because there are lot of things, which are NOT mentioned here either due to paucity of time or some other reasons, but are send to the Premium Clients on appropriate time. Therefore, take professional help, as and when required, if you are really serious about making money from the Indian bourses. 
Also, lot of small investors whisper me behind camera that they are interested in joining my information service, but high subscription fees is what deters them. In this context, I would like to send this simple message to them: Don't bother too much about the current price tag of Rs.18000 per year for the Premium Service, if you are small investor. This price tag is for those who can pay or who have the ability to pay. In earlier too lot of small investors have joined me, giving only a fraction of what i demanded from the rich clients. 
Come to me, I will give a discount on that, so that you are comfortable with it and can be a part of me and my investing ideas. Tell me, what more I can do....since I also subscribe to many services which keeps me updated. Everyone has a limit and it is always prudent to take a 2nd opinion on serious issues like EQUITY INVESTING.

.~with inputs from Capital Market - Live News

Pre-Session: Market may rise after recent sharp sell-off

07-Feb-18:  Market may edge higher in early trade tracking positive global stocks after a huge sell-off. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could gain 119.50 points at the opening bell.

Overseas, Asian stocks edged higher after positive closing on Wall Street. US stocks closed on a higher note yesterday, 6 February 2018, albeit with wild swings witnessed during the day's trading, after two huge sell-offs in a row. The wild moves were attributed to a combination of factors like interest-rate fears, computer-driven trading and the obscure volatility funds that use leverage.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 2326.10 crore yesterday, 6 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1699.74 crore yesterday, 6 February 2018, as per provisional data.

Among corporate news, Hero MotoCorp's net profit rose 4.3% to Rs 805.43 crore on 14.8% growth in net sales to Rs 7305.49 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 6 February 2018.

Hero MotoCorp's chairman, managing director and chief executive officer, Pawan Munjal, said that the company grew on all key performance parameters including revenue, PAT and earnings before interest, taxes, depreciation and amortization (EBITDA) during the quarter, bucking the severe headwinds on the commodities front. With an enhanced focus on the premium segment and scooters, the company is confident of carrying the growth momentum forward, Munjal added.

Aurobindo Pharma, Cipla and Eicher Motors are scheduled to announce October-December 2017 quarterly results today, 7 February 2018.

On the macro front, the Reserve Bank of India's (RBI) two-day Monetary Policy Committee (MPC) meeting concludes later today, 7 February 2018 for the sixth bi-monthly monetary policy statement for 2017-18. The central bank is likely to keep its policy rate on hold, but could toughen its warnings against inflation. The MPC is expected to tilt towards a hawkish tone from its neutral tone following higher fiscal targets, oil price increases and higher minimum support prices (MSP) for crops.

The stock market registered sharp losses yesterday, 6 February 2018 amid global sell-off and in the aftermath of the introduction of the long-term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% in the Budget 2018 unveiled on 1 February 2018. The Sensex had fallen 561.22 points or 1.61% to settle at 34,195.94, its lowest closing level since 5 January 2018.

~~Powered by Capital Market - Live News..

Long Term Capital Gains Tax: Few Words

Photo: The Hindu Business Line

BSE Sensex and NSE’s Nifty 50 closed over 2% lower on last Friday, losing most since November 2016 as as investors were felt disappointed after the NDA government proposed a  10% long-term capital gains (LTCG) tax on equity gains above Rs.1 lakh. Investors were also worried after the finance minister revised upward its fiscal deficit target.

For the week, booth the indices fell 2.7% each. BSE Sensex closed lower by 839.91 points at 35,066.75, while the Nifty 50 fell 256.30 points to close at 10,760.60 on last Friday.

The Sensex plunged over 200 points on Thursday also as the Finance Minister read out the provision of bringing back the long-term capital gains tax on equity shares and equity-oriented mutual funds in the Budget session.

But stocks were soon on their feet. The arguments put forth were, “this was expected anyway and is already factored in to stock prices,” “the grandfathering clause helps protect the profits so far,” “tomorrow is another day,” and so on. However, that was absent on last Friday, after the NDA government's UNHOLY move to bring down a rising share market.

These rules come into force from April 1, 2019 and will apply to the assessment year 2019-20 and subsequent assessment years. So sale of shares held for more than one year, executed after April 1, 2018 will be taxed at 10%.

The FM, in other words, has given investors a one-time chance, to lock in to their profits now, and escape LTCG on profits made so far, till the prescribed date.

Stocks have been soaring higher over the past 12 months on poor fundamentals, taking valuations to crazy levels. I had already mentioned in one of the my posts that unless the government slams the brakes, the markets are likely to remain crazy. 

Indian markets do not have much depth and hence a small push can cause a steep sell-off of at least 10% to 20%. In such a pessimistic scenario, many investors might want to book their long-term gains, ahead of April 1, to avoid paying 10% tax; when these rules come into force. 

Even if stock prices rally higher from these levels, investors will sell, to avoid tax on the profit made from February 1 to end of March. So effectively, Arun Jaitley has put some sort of roof, on this rally; at least for the next few months.

The Rs.1 lakh limit for taxing LTCG is not likely to help most investors as their portfolio values have swelled with the market rally. Moreover, there are hardly any  small retail investors left, as the government failed to provide any incentive to this community -- most of the traders are either compulsory jobbers or are rich, with institutions taking a major role. 

Under existing provisions, where the total income of a Foreign Institutional Investor (FII) includes income by way of long-term capital gains arising from the transfer of certain securities, such capital gains is chargeable to tax at the rate of 10%. But long-term capital gains arising from transfer of equity or equity-oriented fund or a unit of business trusts was so far exempt from income-tax.

The Budget has stated that as in the case of domestic investors, the FIIs will also be liable to tax on such long-term capital gains only in respect of amount of such gains exceeding one lakh rupees.

The FIIs are unlikely to take the new laws in good spirit. 

Most market participants said the introduction of the long-term capital tax gains tax was as expected. However, they welcomed the grandfathering provision, and felt it would act as a soothing factor. Hence, the decision to levy LTCG on equity at the rate of 10% is not surprising and is unlikely to have too adverse impact on the markets.

The equities still remains as the most attractive asset class from a taxation perspective since the holding period to be eligible for LTCG on most other asset classes is three years. The rationalization of LTCG as expected though will create negative on sentiments in the short term but robust ROE  is likely to absorb this 10%, if corporate earnings growth happen as expected.

However, I am having a gut feeling that a large chunk of money will now start to shift slowly towards other asset classes like Real Estate and Gold from equities and mutual funds, for the reasons best known to all of you...... 😄😄😄😄

In the longer term, I think taxing long term capital gains is healthy for the overall economy because according to a government spokesperson: in the first year (2018-19), the NDA government is likely to mop up Rs.20,000 crore (from long term capital gain tax) due to grandfathering. Next year (2019-20) onward, it would be about Rs.40,000 crore.

This future spending by the government, is expected to give a push to the demand or revive the now moribund demand cycle in the Indian economy; though  the inflation fear lurks, due to excessive money coming in the system in the short term. 

Many analysts are of the opinion that other than a knee-jerk reaction, equity market will not be impacted in the medium and the long term as it is still the only real investment opportunity available.

FII investments may be affected in the short run as the issue of tax compliance come up which increases operational cost. Likewise mutual funds may see a brief impact but the grandfathering till 31st January. The real disappointment was the continuation of STT along with LTCG, logically only one should be there.

The Finance Secretary Hasmukh Adhia recently said: This is the first year when we started asking for reports on this. We have got startling Rs 3.76 lakh crore being reported as exempted income. Isn't that too much? Just imagine you as salaried class would have earned this much income, you pay 30% for your toil.  

But its't clear to me, why the government is mixing income tax with capital gains tax, throwing a surreal reason. Besides, the NDA government's mantra to tax the hard working RICH COMMUNITY to feed the poor will surely antagonize a section of the voters. 

In this context, I would like to highlight  two very important issues here:

#The 1st  Class season tickets of railways in Mumbai's suburban railway system is already around 4x times the 2nd class. The question is who travels in the 1st class? Mostly those in Rs.20,000-25000 category -- with astronomical house rents and living style, this amount of monthly salary is not too much in a metropolitan city like Bombay. This has  definitely pinched the middle class.

#In last November, the Goods and Services Tax Council lowered the tax rate for restaurants (barring those located in luxury hotels) to 5%; but did away with input tax credit in the restaurant business. Under input tax credit, businesses can claim an offset on the tax they pay on inputs against the tax they pay to the government on final products. But after this decision, a restaurant is no longer entitled to claim input tax credit on the food items it uses as raw material.. Also, in case of luxury dining the GST is still ~18%. Restaurants located in high-rent areas – which attract a high Goods and Services Tax rate of 18% on commercial rents hereto has been made the greatest scapegoats too feed the poor. 

Another interesting point is that: in all these so-called reforms of the government, the HINDU GENERAL CASTE, whose history in struggle for Independence of India is etched in RED LETTERS, has been quietly left out from the process. 

But having said, we cannot also expected too much from the Congress and the Leftists either; as their earlier activities had clearly indicated similar motives to eliminate the poor and downtrodden in the GENERAL CASTE masses from much of the government incentives. 

Though pungent, it might sound, but this is how the politics in India has shaped-up post Independence of India, with Dr.B R Ambedkar's "Hulla-Gulla" for caste based reservations, followed by religion based.

In his writings, Dr BR Ambekar unraveled an ideological link between Manu who inspired Nietzsche, who in turn inspired Hitler, who in turn (along with Mussolini) inspired the most revered Manuwadis of the Hindu Mahasabha and the RSS: Balakrishna Shivram Moonje, Keshav Baliram Hedgewar and Madhav Sadashiv Golwalkar.

It is most surprising that while the NDA government and their associates are vocal about the atrocities of Islamic and other invaders, they are mum about "Bharat Ratna" & Chairman of the Drafting Committee of the Indian Constitution of the Dr.B R Ambedkar's virulent anti--Hindu diatribes, especially against the Brahmins and Vaishyas (Bania community) his take on "Dalits" who fought for the British to welcome them to India. 

But it seems from some of my Internet based research that more than than Dr.B R Ambedkar it is his blind followers and the Indian media who had tried to vilify the two India communities the most: The Brahmins and the Banias (Vaishyas). 

I feel it would not be an exaggeration to mention here that after Dr.Arun Shourie challenged Dr Ambedkar's contribution to Indian Independence through his book "Worshipping False Gods" he was left out by the Narendra Modi, an OBC (but this Gujarati community is known to be rich and prosperous) in all his cabinet reshuffles. 

Rediff.com wrote:

There is not one instance, not one single, solitary instance in which Ambedkar participated in any activity connected with that struggle to free the country. Quite the contrary--at every possible turn he opposed the campaigns of the National Movement, at every setback to the Movement he was among those cheering the failure.

Thus, while the years culminated in the country's Independence, in Ambedkar's case they culminated in his becoming a member of the Viceroy's Council, that is -- to use the current terms -- a Minister in the British Cabinet in India.

The writings of Ambedkar following the same pattern. The Maharashtra government has by now published 14 volumes of the speeches and writings of Ambedkar. These cover 9,996 pages. Volumes up to the 12th contain his speeches and writing up to 1946. These extend to 7,371 pages. You would be hard put to find one article, one speech, one passage in which Ambedkar can be seen even by inference to be arguing for India's Independence. Quite the contrary.

Pause for a minute and read the following:

All me to say that the British have a moral responsibility towards the scheduled castes. They may have moral responsibilities towards all minorities. But it can never transcend the moral responsibility which rests on them in respect of the untouchables. It is a pity how few Britishers are aware of it and how fewer are prepared to discharge it. British rule in India owes its very existence to the help rendered by the untouchables. Many Britishers think that India was conquered by the Clives, Hastings, Coots and so on. Nothing can be a greater mistake. India was conquered by an army of Indians and the Indians who formed the army were all untouchables. British rule in India would have been impossible if the untouchables had not helped the British to conquer India. Take the Battle of Plassey which laid the beginning of British rule or the battle of Kirkee which completed the conquest of India. In both these fateful battles the soldiers who fought for the British were all untouchables...Who is pleading thus to whom? It is B R Ambedkar writing on 14 May 1946 to a member of the (British) Cabinet Mission, A V Alexander. Nor was this a one-of slip, an arrangement crafted just for the occasion. Indeed, so long as the British were ruling over India, far from trying to hide such views, Ambedkar would lose no opportunity to advertise them, and to advertise what he had been doing to ensure that they came to prevail in practice. 

Therefore it seems, the NDA government like most of its adversaries, is not bothered of a poor GENERAL CASTE BUSINESSMAN unlike its ATTITUDE towards a Businessman from the Dalit or OBC Groups. 

It would not be an exaggeration to mention here that even the Jains, whose names hardly comes in the freedom struggle gets more governmental support than the GENERAL CASTE HINDUS. This is the biggest lacuna, post independence governance of India. 

I am sure that this TAX TERRORISM and other BIZARRE methods to fill the government coffers by employing the formula: 'Tax Rich hard to FEED the Poor", will be used for generating votes, through schemes directed mostly to the Minorities and SC/ST/OBCs, part of the population. 

The General Caste (from all Religions) should therefore, now think seriously as how to extract their dues from the government's collection of taxes which had squeezed them so hard......because how much strange it looks, the NDA government is not bothered about the well-being of the POOR and DOWNTRODDEN from the GENERAL CASTE and has hereto kept them out from the special groups, meant for upliftment and other benefits.

Note: 
I don't have anything against the SC/ST/OBC and Minorities in India. I feel the vulnerable among them need center's support and I wholeheartedly welcome this view. But then assistance ONLY in the name of CASTE, RELIGION, GENDER (women's reservation bill, anti-men laws, etc) and the like, without taking into account other socio-economic factors, is a dangerous concept in a diverse country like India. 

It is therefore, to be understood that I am only speaking about some typical birth based reservations in India and its fall out among the general population. Unfortunately, it is the government of the day, who is segregating the masses not in terms of a general criterion, but on the basis of where he/she was BORN -- aren't we REVERTING back to the Medieval Period ?

I hope you would also agree with me, that POOR and DOWNTRODDEN from any community cutting across CASTE, RELIGION and other such parochial parameters, should be bolstered so that India grows holistically. 

The Onus is therefore on you, my fellow Indians, to raise the pitch of your voices against the CASTE, CREED, RELIGION and GENDER based discriminations, undertaken by the successive governments in India, so that it reaches Delhi and the center is forced to act on the same. 
Bibliography:
#The Hindu Businessline,
#The Economic Times,
#Live Mint, 
#MoneyControl.com and other sources from the Internet.

LTCG Tax in Equities: Rob Peter to pay Paul?

Photo: India Infoline

The much anticipated LTCG Tax is now back with a new avatar in finance minister, Arun Jaitley's budget documents. The LTCG of 10% on capital gains of over Rs 1 lakh without the benefit of indexing, will co-exist with the existing securities transaction tax or STT. Needless to say, with the reintroduction of the LTCG and along with the STT, equities will bear the brunt of both taxes together. 

However, since the exemption under long term being abolished, there will be short term sell off in equities to get out or the traders will exit before Rs.1 lakh cap is violated. This is seen positive for the brokerage companies who might see more revenues, due to more and more short term trading. However, on the flip side, it will discourage investors to bring large amounts of legitimate money from other sources into equities. And unless and until there is large scale retail participation, there will not be much improvement in the retail brokerage segment of the equity brokerage houses. 

Hereto, this NDA Government has done very little precious to lift the sentiment of the people towards equity investing  I had mentioned in my earlier write up that as long as the government or the RBI does not slam the brakes, the markets are likely to go crazy. The inevitable has happened as the FM pulled the levers to reign in the equity markets. 

Andy Mukherjee wrote in ET on 30 January, 2018: 

A long-term capital-gains levy on equity can be problematic in a country perennially short of domestic savings. In a frothy stock market, it's like crying "fire" in a crowded room. Profits from selling shares that were bought more than a year earlier has been tax-exempt in India for a decade and a half. It was replaced 14 years ago by an imposition on all securities transactions, regardless of gains or losses. Every year, there's talk of bringing back a capital-gains charge. Speculation is unusually intense ahead of the Feb. 1 federal budget, with Deloitte Touche Tohmatsu India LLP calling capital-gains tweaks "low-hanging fruit." 

This move of taxing long term capital gains, can also be looked upon in another way, as indirect boost to the moribund real estate sector, where illegitimate funds still finds lot of avenues  to enter.  Also, the cap of Rs.1 lakhs is too small for today and cannot be called as a safeguard limit for small investors, especially when many stocks have more than doubled in 52-weeks. 

Another important announcement which the Finance Minister made post his budget speech was that Rs.3.67 lakh crore was the exempted income on long term capital gains in the last assessment year alone, a bulk of which came from large investors. Mr.Jaitley is of the opinion that gains tax, can not only support the health scheme, but also foot the bill for the other major announcement in his budget – minimum support price (MSP) payment to farmers that is 1.5 times the production cost. 

This is thus a positive development for the Agri sector and health insurance companies, apart from the private hospitals, medical equipment makers, and real estate. This scheme is also expected to give a boost to the rural economy.  

Budget 2018 has proposed a tax relief for buyers and sellers of property by allowing it to be valued at up to 5% below circle rates for calculation of stamp duty and capital gains tax. This is likely to revive 2ndary market transactions. 

The Times Now writes: 

#As many as 51 lakh houses in rural areas are to be built in 2018-19. Also, a dedicated Affordable Housing Fund was announced in this Budget. These are the right moves towards achieving the vision of Housing for all by 2022.

#The regional air connectivity scheme to connect 56 unserved airports is a good news for business growth and office space demand in smaller cities, with a natural spinoff demand for housing on the back of job generation.

#Allocation of Rs.1 lakh crore to update education infrastructure over the next four years may result in the development of new education institutes. In addition, if the Government emphasizes more on a definitive student housing policy, a new avenue will open up for the real estate sector.

#The allocation of Rs.5.97 lakh crore on infrastructure spending is a welcome move, though we need a massive push to ensure that the country’s infrastructure meets global standards.

The NDA government continues to boost the affordable housing sector by setting up an affordable housing fund under the umbrella of the Pradhan Mantri Aawas Yojna, which will give impetus to the growth of  companies like Housing Development & Infrastructure Limited or HDIL (Rs.56.60). 

The insurance industry has welcomed the Budget saying the proposals for a national safety net for the poor in particular and the health insurance sector in particular will act as a catalyst to increase health insurance penetration in India. Extending the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a positive move to bring more people into the insurance ambit, they said. Taking a cue from this we could see a spurt in the share price of Reliance Capital Ltd (Rs.485.90).

Note: I am still recovering from the surgery in gums followed by RCT. I am not able to speak well due to due this episode. Hence, I have kept my mobile phone in switched off mode; as temptations to speak might delay the healing process. My dentist has advised me to speak at little as possible. You can communicate with me, through e-mails, Facebook and Yahoo Messengers.