- Wealth PMS
The Slack Discussions
The Slack group at Capital Mind Premium has been extremely active and if you haven’t been there, pop us a note by replying to this email. (If you’re a trial member this probably sound like Greek to you; it will be available when you sign up!)
A brief summary of some of the interesting things discussed there in the last few days:
#general: The Immaculate Conception of Reliance Jio
More than five years after the auctions took place, the losers — including Sunil Mittal’s Bharti Airtel, Kumar Mangalam Birla’s Idea Cellular and the UK-based multinational Vodafone — are all still smarting at the outcome. On the face of it, they were outwitted by a company which is now known as Reliance Jio Infocomm. But the company was then a little known firm called Infotel Broadband Services Private Limited (IBSPL), promoted by Anant Nahata, son of Mahendra Nahata (of Himachal Futuristic Communications Limited fame), which allegedly acted as a “front” for the Reliance group.
How did this microscopic company find the humungous amount of finance to become a major player in this intensely competitive industry?
#general: Flipkart launches mobile wallet to take on Paytm, others
Flipkart Money will help the firm increase the proportion of cashless transactions, and cut operational costs involved with cash on delivery payments. (Link)
#general: US nonfarm payrolls totaled 242K in Feb vs. 190K estimate
The U.S. economy added a better-than-expected 242,000 jobs in February while the unemployment rate held steady at 4.9 percent. Economists were expecting 190,000 new positions and no change in the jobless figure.
Despite the strong headline number, the closely watched average hourly wages actually declined for the month, falling three cents and equating to a 2.2 percent annualized jump, down from 2.5 percent in January. Fed policy makers are looking at wages for evidence of inflation. The average hourly work week also declined 0.2 hours to 34.4. (Link)
#general: The London Fund Manager, Libya and the $230,000 Hotel Bill
Marino is accused of using a note restructuring and performance and management fees for his own benefit before he was terminated in November 2014. He allegedly racked up expenses on a company credit card for a helicopter ride, clothes and restaurant bills. He also spent 165,000 pounds ($230,000) at the five-star Lanesborough Hotel, including 42,000 pounds on parking, the fund says in the suit. (Link)
#general: SC upholds TRAI call drop compensation
The Supreme Court on Friday declined to stay TRAI’s mandate that telecom operators must compensate customers for call drops. The SC had been hearing a petition filed by the Cellular Operators’ Association of India, which challenged the recent decision of the Delhi High Court in favour of TRAI. (Link)
#general: Five tyre firms operated as cartel, finds CCI probe
Between 2011 and 2014, they indirectly determined the price of tyres in the market, says report. The investigation wing of the Competition Commission of India (CCI) has found Apollo Tyres, MRF, CEAT, JK Tyres and Birla Tyres guilty of cartelisation. (Link)
#general: Jim Rogers: There’s a 100% Probability of a U.S. Recession Within a Year
Rogers Holdings Chairman Jim Rogers is certain that the U.S. economy will be in recession in the next 12 months.
During an interview on Bloomberg TV with Guy Johnson, the famous investor said that there was a 100 percent probability that the U.S. economy would be in a downturn within one year.(Link)
#general: Japan’s major business lobby to urge workers to take more holidays
Japan’s most influential business lobby pledged Friday to urge its member firms to have employees take more holidays in a bid to boost the tourism industry.
In a dialogue with the government, the chief of the Japan Business Federation, better known as Keidanren, said the lobby will call on companies to urge employees to increase the number of paid holidays they take by about three days a year. (Link)
#general: Battered by drop in oil prices and Jindal’s fiscal policies, Louisiana falls into budget crisis
Already, the state of Louisiana had gutted university spending and depleted its rainy-day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices. (Link)
#general: Parrikar finds $3 bn lying forgotten in US account
New Delhi had placed the money in the Pentagon-managed account for weaponry it was buying under the Foreign Military Sales (FMS) programme. (Link)
#general: Controversial EPF tax may be deferred after PM Modi steps in
A controversial budget proposal to tax provident fund withdrawals may be deferred, with Prime Minister Narendra Modi asking for wider consultations on the move that has turned into a political hot potato.
The deferment, not a rollback, is likely given that Modi is sensitive to the salaried class, top government sources told Hindustan Times, signaling some possible relief for a core support base of the Prime Minister. The proposal is to come into effect from April 1. (Link)
#general: The Deadly Trading Bias Affecting Stock Market Traders
@StockTwits – 155 years of crude oil history
#general: Bad phrasing in budget speech caused confusion on EPF tax proposal
Union revenue secretary Hasmukh Adhia has defended the proposal to tax Employee’s Provident Fund withdrawals, saying the intention was onl
y to encourage investment in pension schemes, but the phrasing in the Budget speech caused the confusion.
“The entire thing happened not because of any illogicality in the step but due to the communication gap,” Adhia said on Saturday at an interaction on Budget at the Ahmedabad Management Association in the city. (Link)
#general: Vijay Mallya: The Tycoon Who Gave Big Business A Bad Name
#general: Adani Group may buy Jindal Power; valuation likely at Rs 18,000-20,000 crore, inclusive of debt
Naveen Jindal-promoted Jindal Steel & Power Limited (JSPL) is in advanced discussions with Adani Group to sell its power generating subsidiary – Jindal Power (JPL), four people familiar with the development said.
The transaction, which could end up being the largest in the power sector till date, values the business around Rs 18,000-20,000 crore, inclusive of debt, the people added on condition of anonymity as the talks are still private. (Link)
#general: India: Capital Local Area Bank set to become first small finance bank to start ops
Jalandhar-based Capital Local Area Bank has become the first entity to receive the Reserve Bank of India‘s licence to start operations as a small finance bank, according to a report in The Economic Times.
In September last year, Reserve Bank of India granted in-principle licences to 10 applicants to set up small finance banks, including Capital Local Area Bank. (Link)
#general: UK future ‘may be brighter outside EU’, says BCC boss
John Longworth, head of the British Chambers of Commerce, described the EU referendum as a choice between the “devil and the deep blue sea”.
He told its annual conference that voters faced “undoubtedly a tough choice”. One option was staying in an “essentially unreformed EU”, with the other being the uncertainty of leaving.(Link)
#general: Iran Billionaire Sentenced to Death in Oil Fund Fraud Case
Iranian businessman Babak Zanjani was sentenced to death after being found guilty in a fraud case involving an oil fund, the state-run Iranian Students’ News Agency reported on Sunday, citing a judicial official.
The court found enough evidence to convict Zanjani and two other people, who were also sentenced to death, said Gholam Hossein Mohseni-Ejei, a spokesman for Iran’s judiciary. They were also ordered to repay a quarter of the money they laundered, according to the report. Zanjani can appeal the verdict. (Link)
#general: China lowers GDP target to 6.5%
China’s economy, which grew 6.9 percent last year, was within “an appropriate range,” Premier Li Keqiang said in his work report for this year submitted to the annual session of parliament, the National People’s Congress, which opened here on Saturday. (Link)
#general: Germany’s Schaeuble says Brexit would be economic ‘poison
A British vote to leave the European Union would damage the British, European and global economies, German Finance Minister Wolfgang Schaeuble said in an interview with the BBC.
A British exit following a June 23 membership referendum would rock the EU by ripping away its second-largest economy and its richest financial center. Prime Minister David Cameron has said Britain will be better off remaining in the bloc. (Link)
#forex: Eurodollar COT Says Ugly Drop Is Still Ahead of Us
#forex: China’s foreign reserves plunge half a trillion dollars
China today said its foreign reserves, the world’s largest, declined by about half a trillion dollars last year which largely went to its citizens and companies.
“China’s foreign reserves declined by about half a trillion US dollars in 2015,” central bank deputy governor Yi Gang said today. (Link)
#general: Tackling bad debt: 27 public sector banks may be merged into six
Consolidation is seen as the way forward for the India’s public sector banks (PSBs) that have been reeling under the pressure of mounting bad loans. Participants of the Gyan Sangam event, which is organised for heads of PSBs and financial institution said that this could bring the number of banks to six from the present 27, according to a Hindustan Times report. (Link)
#macronomics: Consumer Spending in India
Consumer Spending in India averaged 9323.56 INR Billion from 2004 until 2015, reaching an all time high of 15945.81 INR Billion in the first quarter of 2015 and a record low of 4469.88 INR Billion in the third quarter of 2004. Consumer Spending in India is reported by the Ministry of Statistics and Programme Implementation (MOSPI). (Link)
#general: The Great Investment Advice Hidden in Warren Buffett’s Annual Letter
@nixcraft – 29 common beginner Python errors on one page
#general: Pharma Crusader Dinesh Thakur Takes Drug Regulators to Court
One of India’s best-known whistleblowers, who exposed dangerous practices in the generic drug industry in 2013, is taking the country’s drugs regulators to court, accusing them of failing to enforce rules on drug safety in the $15 billion industry.
Three years ago, Dinesh Thakur exposed how India’s then largest drugmaker and his former employer, Ranbaxy Laboratories, failed to conduct proper safety and quality tests on drugs and lied to regulators about its procedures. (Link)
#general: Government may merge 27 public sector banks into just six
With public sector banks under pressure to tackle their dismal bad loan scenario, consolidation is the way forward, and this could bring down the number of lenders to about six from the present 27, participants in the recently-held Gyan Sangam, a retreat for chiefs of public sector banks and financial institutions, told HT.
The time frame for the mergers will ensure there are no disruptions, the sources said. As banks are short-staffed, a downsizing would not be required, they said. (Link)
#general: Government can’t waive tax on Vodafone, Cairn: Adhia
UK oil explorer Cairn Energy is facing a tax demand of Rs 10,247 crore and Vodafone over $11 billion of 67% stake acquisition. (Link)
#general: Hong Kong Home Sales Tumble 70% as Slowdown Intensifies
Hong Kong residential home sales plunged 70 percent in February from a year earlier to a 25-year low, as falling prices and economic uncertainty deterred buyers.
Last month, 1,807 homes were sold in Hong Kong, compared with 6,027 a year earlier, according to government statistics. Home sales fell from 2,045 in January, the data show.(Link)
#general: India’s big move into solar is already paying off
India’s massive bet on solar power is paying off far earlier than anticipated.
The price of solar power has plummeted in recent months to levels rivaling that of coal, positioning the renewable source as a viable mainstream option in a country where 300 million people live without electricity. (Link)
#general: Iron Ore Jumps Most on Record as Market Goes ‘Berserk’
Iron ore soared the most ever after Chinese policy makers signaled their willingness to buttress economic growth, boosting the outlook for steel consumption in the top user and igniting speculation that some investors who’d bet against the market had been caught out.(Link)
#general: Three Gulf Bull Markets in Two Weeks as Saudi Stocks Inch Closer
Gulf Arab stocks are picking up momentum, with Qatari shares on Monday following gauges in Dubai and Abu Dhabi into a bull market.
The QE Index advanced 2.3 percent, taking the measure’s gain since a Jan. 18 low to 22 percent. Abu Dhabi’s ADX General Index entered a so-called bull market on Sunday and Dubai’s DFM General Index reached the milestone last month. (Link)
#general: MSG in Your Noodles: Gurmeet Ram Rahim Singh Insaan Launches ‘Organic’ Grocery Products
MSG by the way, stands for ‘Mastana-ji’, ‘Satnaam-ji’ and ‘Gurmeet Ram Rahim Singh’ the three heads of the Dera. The company which will manufacture the goods will be called MSG All-Trading International Private Limited which includes a host of products including pulses, rice, khichri, pickles, ghee, spices, jams, honey, mineral water and noodles. All raw material will be made on land owned by Dera. Apparently, the products are going to be ‘swadeshi’ and ‘organic’. (Link)
#macronomics: Fed’s Brainard: Global ‘crosscurrents’ may hit US
In separate prepared remarks in Washington, neither Fed Vice Chairman Stanley Fischer nor Gov. Lael Brainard made direct reference to next week’s meeting of the Federal Open Market Committee. But Brainard argued for patience in rate increases amid possible risks that inflation and U.S. economic activity will fall. (Link)
#stocks: Nomura says Coal India Pushed to Pay “Hefty Dividend” by Government; Shares to Rise in Next Few Days
Foreign brokerage Nomura has said that the government may have “pushed” Coal India to pay a “hefty dividend” of Rs 27.4 a share to make up for its inability to raise funds through disinvestment in the company.
The brokerage had forecasted a dividend of Rs 20 a share and said that the “positive surprise” of account of the high dividend will have a positive impact on share. (Link)
#macronomics: Venezuela Is Using Distressed Bonds to Pay Off Its Debts to Drugmakers
Novartis, Bayer, and Sanofi acquired dollar-denominated bonds from state-owned oil company PDVSA that they resold for as little as a third of their face value, according to a Reuter’s analysis of regulatory filings and sources with knowledge of the situation. This contributed to some $500 million in foreign exchange losses that the three companies suffered in Venezuela in 2015. The extent of the bond transactions has not been previously reported. (Link)
#general: Housing Sales fall 17%, New Projects dip 31% in July-December: CBRE
Housing sales fell by 17 per cent while new projects declined by 31 per cent in the second half of 2015 due to high price and cautious buyer sentiments, according to property consultant CBRE.
In its latest report ‘India Residential, H2 2015’, CBRE said residential demand remained sluggish with housing sales dipping by around 17 per cent compared to the first half of 2015.(Link)
#stocks: CRISIL Down-grades Best Foods’ Debt on Delays in Servicing Term Loans
CRISIL has downgraded its ratings on the bank facilities of Best Foods Limited (Best Foods) to ‘CRISIL D/CRISIL D’ from ‘CRISIL BBB/Stable/CRISIL A3+’.
The rating downgrade reflects delays in servicing terms loans by Best Foods in the recent past due to weakened liquidity, arising from a lower basmati rice prices, stretch in export receivables and large stock of inventory. (Link)
#macronomics: China Tries its Hand at Pre-crime
China’s effort to flush out threats to stability is expanding into an area that used to exist only in dystopian sci-fi: pre-crime. The Communist Party has directed one of the country’s largest state-run defense contractors, China Electronics Technology Group, to develop software to collate data on jobs, hobbies, consumption habits, and other behavior of ordinary citizens to predict terrorist acts before they occur. (Link)
#general: EPF Tax row and Rollback: Why Politics Always Trumps Economics in India
A ranking of India’s finance ministers should put Yashwant Sinha right there on top. He cleaned up the excise structure – it used to be a right royal mess – and controlled subsidies. He brought down real interest rates, freed up telecom, and tried to deregulate the prices of petrol and diesel.
Yet, Sinha remains somewhat unsung. The reasons for that could be two.
First, not many at the time understood the full impact of what he was doing. Secondly, he was forced to climb down on some of his bold measures, earning for himself the uncharitable sobriquet of Rollback Sinha. (Link)
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Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.