Contact Your Financial Adviser Money Making MC
Balanced Funds(The Total Investment & Insurance
Solutions)
In times of volatile markets and turbulent scenarios, one
should opt for a judicious mix of risk and return. In such scenarios,
balanced funds may be the right choice for investors. Also termed hybrid
funds, these products offer a cushion of safer investments in debt, to
compensate for the riskier equity part.
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Saturday 3 September 2016
Confused b/w Equity & Debt? Strike the right balance with Balanced Funds-The Total Investment & Insurance Solutions
Friday 2 September 2016
As savings continue to decline, does India need a rate hike? -The Total Investment & Insurance Solutions
Contact Your Financial
Adviser Money Making MC
2
September 2016
 |
Rate Hike (The Total
Investment & Insurance Solutions)
India’s savings rate is declining. The private
sector, including households and corporates are the main driver of total
savings, while the public sector has been a drag. Within the private sector,
households are the main source of savings. This component has, however, emerged
as a key drain, with its share in total savings falling to 60% in FY2014-2015
from 70% four years earlier.
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Household Accounts (The
Total Investment & Insurance Solutions)
In a report, DBS Bank
Ltd, says, "The fall in savings needs to be arrested given India’s
investment needs. Relying on foreign savings puts pressure on the current
account and the returns from that investment go abroad as well. Corrective
measures are underway to lift savings and investment, but a quick turnaround is
unlikely." The Total Investment
& Insurance Solutions
There is a combination of factors are behind
this slowdown, the report says adding, low incomes are one, which along with
extended periods of high inflation, pushed households to set aside a bigger
proportion of incomes for consumption, thus impinging on savings. Not
surprisingly, household savings now make less than a quarter of their
disposable incomes, from above 30% earlier, it added.
DBS says, besides
incomes, interest rates, inflation and demographics also drive household
savings. Even though India’s demographics are amongst the most favourable in
the region, years of high inflation and negative real rates have dented
savings. The Total Investment &
Insurance Solutions
While interest rates were raised in response
to high inflation in 2011-13, real deposit rates were still negative (see chart
below). Back then, wholesale price index (WPI) inflation was a policy target,
rather than a much elevated consumer price index (CPI) inflation, which meant
real deposit rates were deeper in red and for longer, than earlier understood.
 |
Real Deposits rate (The
Total Investment & Insurance Solutions)
In addition to falling households’ savings,
DBS says, its composition is imbalanced. In 2012-13, two-thirds of household
savings comprised of physical assets like gold and property. This was driven by
a need to offset inflation, though it led to a ballooning current account
deficit (CAD) driven by gold imports. Not only did this hurt the current
account, it lowered investment into the real economy.
"More recently, some of this imbalance
has corrected, but physical assets continue to dominate the savings mix. The
marginal increase in financial savings has also been concentrated in shares and
debentures, insurance and retirement funds rather than bank deposits," the
report says. (See chart below)
 |
| Breakdown Financial Savings (The Total Investment & Insurance Solutions) |
According to the research note, India's
savings rate is caught in a cyclical rather than structural slowdown. It says,
"Unlike much of Asia where rising incomes have been accompanied by a fall
in savings, India’s per capita gross domestic product (GDP) is still amongst
the lowest in the region. Despite this level of incomes, savings have been
falling (See chart below).
"We reckon this is
more a function of low incomes, tough economic conditions, falling real returns
and high inflation, rather than structural impediments of a rising dependency
ratio or a fall in working age population," DBS Bank says. The Total Investment & Insurance
Solutions
The report endorses demographics as one of
India's key strengths. It says, "While Japan, China and many Western
countries grapple with ageing populations, India’s dependency ratio is
declining. The working age group (15-64 years) makes up close to two-thirds of
the overall population. Growth in the working age population will exceed
overall population growth for at least two more decades, pointing to a
sustained fall in the dependency ratio. Although structural tailwinds are in
place, the savings rate continues to stagnate, pointing to cyclical
hurdles."
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Per Capita Income (The
Total Investment & Insurance Solutions)
In the near-term, DBS says, Indian
authorities need to continue encouraging households’ to shift from physical
savings to financial avenues. "This is important not only to meet
investment spending needs, but also ensure efficient savings for growth and limit
external imbalances," it added.
On policy, the report
says, further significant rate cuts are thereby unlikely in the interest of
maintaining positive real and nominal deposit rates. IT says, "We look for
25 basis points (bps) cut in December, before rates plateau, contingent on
sharp disinflation to or below 5% and dovish monetary policy committee." The Total Investment & Insurance
Solutions
"Further out,
concerted efforts to lift incomes and job creation are crucial structural
tailwinds to lift the savings rate. Work is in progress on this front, under
the government’s ‘Make in India’ initiative, skills development, ensuring
education access and improving the ease of doing business. Until the domestic
private sector is able to pick the baton, we expect public sector and foreign
direct investments to drive the initial part of the capex cycle," the
report from DBS concluded. The Total
Investment & Insurance Solutions
Piramal Fund invests Rs 2,320 crore in Lodha Group's projects-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2
September 2016
In the largest debt transaction
within the real estate funding space, Piramal Fund Management (PFM) has
invested Rs 2,320 crore across several projects of Lodha Group in the city to
replace existing debts. The Total Investment & Insurance Solutions
"The use of proceeds will
ensure completion of what we believe to be marquee projects in Central and
South Mumbai," said PFM's Managing Director Khushru Jijina.
The deal has been structured as a
fixed return debt investment with periodic coupon payments and has an
appropriate security mechanism in place, including hard asset cover as well as
an escrow of receivables, a statement said. The Total Investment
& Insurance Solutions
"We are seeing momentum
building up in our business with sales, deliveries and collections all moving
up. This transaction will further strengthen our balance sheet and give us room
to further improve our growth," said Group's Managing Director Abhishek
Lodha.The
Total Investment & Insurance Solutions
Piramal Fund invests Rs 2,320 crore in Lodha Group's projects-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2
September 2016
In the largest debt transaction
within the real estate funding space, Piramal Fund Management (PFM) has
invested Rs 2,320 crore across several projects of Lodha Group in the city to
replace existing debts. The Total Investment & Insurance Solutions
"The use of proceeds will
ensure completion of what we believe to be marquee projects in Central and
South Mumbai," said PFM's Managing Director Khushru Jijina.
The deal has been structured as a
fixed return debt investment with periodic coupon payments and has an
appropriate security mechanism in place, including hard asset cover as well as
an escrow of receivables, a statement said. The Total Investment
& Insurance Solutions
"We are seeing momentum
building up in our business with sales, deliveries and collections all moving
up. This transaction will further strengthen our balance sheet and give us room
to further improve our growth," said Group's Managing Director Abhishek
Lodha.The
Total Investment & Insurance Solutions
Piramal Fund invests Rs 2,320 crore in Lodha Group's projects-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2
September 2016
In the largest debt transaction
within the real estate funding space, Piramal Fund Management (PFM) has
invested Rs 2,320 crore across several projects of Lodha Group in the city to
replace existing debts. The Total Investment & Insurance Solutions
"The use of proceeds will
ensure completion of what we believe to be marquee projects in Central and
South Mumbai," said PFM's Managing Director Khushru Jijina.
The deal has been structured as a
fixed return debt investment with periodic coupon payments and has an
appropriate security mechanism in place, including hard asset cover as well as
an escrow of receivables, a statement said. The Total Investment
& Insurance Solutions
"We are seeing momentum
building up in our business with sales, deliveries and collections all moving
up. This transaction will further strengthen our balance sheet and give us room
to further improve our growth," said Group's Managing Director Abhishek
Lodha.The
Total Investment & Insurance Solutions
Radiologists on strike; ultrasound, MRI centres closed in Agra-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2
September 2016
More than 200 ultrasound, CT scan,
MRI centres, alongwith over 50 X-ray clinics in the city are closed as members
of the Indian Radiological and Imaging Association began their indefinite
strike on Thursday to demand modifications in the Pre-Conception & Pre-Natal
Diagnostic Techniques Act (PCPNDT). The Total Investment & Insurance
Solutions
The national president-elect of the
association, Dr. Bhupendra Ahuja said the provisions under the act are
draconian and arbitrary. For minor paper-work lapses, these centres are sealed
and doctors booked. This situation has to change.
The patients, meanwhile, were put to
a lot of difficulty looking for ways out. "In particular, road accident
victims who urgently need CT scan reports are in trouble due to the strike
which could continue for long," said an employee of a diagnostic centre at
Hari Parbat.
The strike is total with more than
12,000 doctors across India joining it, the association activists said. The Total Investment
& Insurance Solutions
Other organisations like the
Federation of Gynaecologists and Obstetricians and the Indian Medical Association
were also extending support to radiologists.The Total Investment
& Insurance Solutions
Government notifies National Apprenticeship Promotion Scheme-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2
September 2016
The government on Thursday notified
the National Apprenticeship Promotion Scheme to offer financial incentives to
employers.
The Total Investment & Insurance Solutions
"The Scheme has an outlay of
Rs. 10,000 crore with a target of 50 Lakh apprentices to be trained by
2019-20. The
Total Investment & Insurance Solutions
Union Ministry of Skill Development
and Entrepreneurship in a statement here said that apprenticeship training is
considered to be one of the most efficient ways to develop skilled manpower for
the country. The
Total Investment & Insurance Solutions
"It provides for an industry
led, practice oriented, effective and efficient mode of formal training. The
National Policy of Skill Development and Entrepreneurship, 2015 launched by
Prime Minister Narendra Modi focuses on apprenticeship as one of the key
components for creating skilled manpower in India," government said. The Total Investment
& Insurance Solutions
The policy proposes to work
pro-actively with the industry including MSME to facilitate tenfold increase
opportunities in the country by 2020. The Total Investment
& Insurance Solutions
Nifty, Sensex buck the weakness, head higher – Weekly closing report-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
2 September 2016
I had mentioned
in last week’s closing report that Nifty, Sensex were looking weak. The major
indices of the Indian stock exchanges made good gains over the week including
hitting their new 52-week highs. The trends of the major indices in the course
of the week’s trading are given in the table below: The Total Investment
& Insurance Solutions
 |
Major Indices (The Total
Investment & Insurance Solutions)
Indian equity markets traded flat
during the mid-afternoon session on Monday prompted by mixed global cues and
lower crude oil prices. Selling pressure was witnessed in information
technology (IT), healthcare and banking stocks. The BSE market breadth was
tilted in favour of the bears -- with 1,465 declines and 1,216 advances. On the
NSE, on Monday, there were 636 advances, 821 declines and 69 unchanged.
State-run Rural Electrification Corporation (REC) on Sunday said it will seek
the approval of its shareholders on September 21 for raising Rs50,000 crore
through non-convertible debentures (NCDs). The company’s shares closed at
Rs227.30, down 1.37% on the BSE, on Monday. The Total Investment
& Insurance Solutions
On Tuesday the markets were buoyed
on strong buying support across sectors, coupled with positive global cues
during the mid-afternoon session on Tuesday. In fact, almost the entire gain of
the week came on Tuesday. Healthy buying was witnessed in automobile, banking
and healthcare stocks. The BSE market breadth was skewed in favour of the bulls
-- with 1,631 advances and 1,081 declines. On the NSE, on Tuesday, there were
891 advances, 491 declines and 81 unchanged. Pointing to solid growth in
household spending and a strengthening job market, Yellen said the US economy
is "now nearing" the Fed's statutory goals of maximum employment and
price stability. Analysts said it's possible for the Fed to hike interest rates
as soon as September. The Total Investment & Insurance
Solutions
The government in India on Tuesday
announced to issue the fifth tranche of Sovereign Gold Bonds, the subscription
of which will be open from September 1-9. The Bonds will be issued on September
23. The Sovereign Gold Bond, a financial asset, was launched by the
government last year as an alternative to purchasing the metal gold.
Accordingly, four tranches of issuances have been undertaken during 2015-16 and
2016-17 so far.
On Wednesday, Nifty and Sensex hit
their new 52-week highs again. The benchmark indices initially opened on a
flat-to-positive note on Wednesday prompted by mixed cues from Asian and
European markets. Market awaited the announcement of the gross domestic product
(GDP) data for the first quarter of 2016-17, among others. The indices
marginally capped gains due to a sharp up-move in the dollar index and lower
crude oil prices and pulled the markets back from their morning peak levels.
However, gains in the rupee's value kept the market sentiment buoyed to close
with appreciable gains. The Total Investment & Insurance
Solutions
Following the big ticket
announcement by Reliance Industries on Jio commercial launch, key Indian stock
market indices were trading flat on Thursday afternoon. Most telecom stocks
were trading lower. Selling pressure was seen in telecom, technology, media and
entertainment (TECK) and realty sectors, while good buying was observed in
auto, metal and fast moving consumer goods (FMCG) sectors. On the NSE, on
Thursday, there were 479 advances, 993 declines and 50 unchanged. The Total Investment
& Insurance Solutions
Taking the tariff war and
competition in Indian telecom a new level, Reliance Industries Chairman Mukesh
Ambani on Thursday said domestic voice calls on the Jio network will be free
forever, and unveiled a four-month introductory offer of free voice and data
services. "The era of paying for voice calls is ending," Ambani told
the Annual General Meeting of Reliance Industries (RIL) in Mumbai. "No Jio
customer will ever have to pay for voice calls again," he added. Bharti
Airtel shares closed at Rs310.50, down 6.43% on the BSE. Reliance Industries
shares closed at Rs1,029.15, down 2.73% on the BSE.
On Friday, the major indices of the
Indian stock markets staged a minor rally to close with small gains of around
0.40% over Thursday’s close. With NSE trading volumes on the lower side on
Friday, investors were clearly cautious before the week-end and market holiday
on Monday. On Friday, there was also a general strike called by the Leftists
all over India; but the response to the strike call was at a minimum in most
parts of the country. The Total Investment & Insurance
Solutions
Thursday 1 September 2016
Global Markets & News-The Total Investment & Insurance Solutions
Contact Your Financial Adviser
Money Making MC
1 September 2016
OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 +0.15%) are up +0.16% and European
stocks are up +1.00% at a 2-week high amid positive signs for global growth.
Manufacturing activity in China unexpectedly expanded at the fastest pace in
nearly 2 years last month and manufacturing activity in the UK expanded at the
fastest pace in 10 months. Mining stocks are leading gains in the overall
market with Glencore Plc and Rio Tinto up over 1% as signs of stronger global
manufacturing activity boosts copper prices. Asian stocks settled mixed: Japan
+0.23%, Hong Kong +0.81%, China -0.72%,
Taiwan -0.75%, Australia -0.32%, Singapore -0.15%, South Korea -0.33%, India -0.10%. Despite the
stronger-than-expected Chinese manufacturing data, Chinese stocks closed lower
on speculation the stronger data will reduce the chances of additional
government stimulus. Japan's Nikkei Stock Index climbed to a 2-1/2 week high as
exporter stocks rallied after USD/JPY rose to a 1-month high, which improves
the earnings prospects of exporter companies.
The dollar index (DXY00 -0.03%) is down -0.03%. EUR/USD (^EURUSD)
is down -0.08%. USD/JPY (^USDJPY)
is up +0.25% at a 1-month high.
Dec T-note prices (ZNZ16 -0.16%) are down -8 ticks.
The UK Aug Markit
manufacturing PMI rose +5.0 to 53.3, stronger than expectations of +0.8 to 49.0
and the fastest pace of expansion in 10 months.
The China Aug
manufacturing PMI unexpectedly rose +0.5 to 50.4, stronger than expectations of -0.1 to
49.8 and the fastest pace of expansion in 1-3/4 years. The Total Investment & Insurance Solutions
Key U.S. news today
includes: (1) Aug Challenger job cuts (Jul -57.1% y/y), (2) weekly initial unemployment
claims (expected +4,000 to 265,000, previous -1,000
to 261,000) and continuing claims (expected -2,000
to 2.143 million, previous -30,000
to 2.145 million), (3) revised Q2 non-farm productivity (expected -0.6%, prelim-Q1 -0.5%) and revised Q2 unit labor costs
(expected +2.0%, prelim-Q2 +2.0%), (4) final-Aug Markit U.S. manufacturing PMI
(expected unch at 52.1, prelim-Aug -0.8 to 52.1), (5) Jul construction
spending (expected +0.5%, Jun -0.6% m/m), (6) Aug ISM manufacturing index
(expected -0.6 to 52.0, Jul -0.6 to
52.6), (7) Aug total vehicle sales (expected 17.20 million, Jul 17.77 million),
and (8) USDA weekly Export Sales.
Russell 1000 companies
that report earnings today: Campbell Soup (consensus $0.50), Cooper Cos (2.28),
VeriFone (0.40), lululemon athletica (0.38), Broadcom (2.76), Piedmont Natural
Gas (-0.10), Hain Celestial Group (0.56).
U.S. IPO's scheduled to
price today: none.
Equity conferences
during the remainder of this week include: none. The Total Investment & Insurance Solutions
Charter Communications (CHTR +0.46%) rose nearly 4% in after-hours
trading after it was announced that it will replace EMC in the S&P 500
after the close of trading on Wednesday, September 7.
Wynn Resorts (WYNN -0.92%) is up over 3% and Las Vegas
Sands (LVS -1.47%) is up nearly 2% in pre-market
trading after data showed Macau gross gaming revenue unexpectedly rose +1.1% in
Aug, better than expectations of a -1.5% decline.
Ctrip.com International
Ltd (CTRP unch) reported Q2 revenue of $683.5
million, above consensus of $656.7 million.
Box (BOX +3.15%) rallied 4% in after-hours
trading after it raised guidance on full-year revenue to $394 million-$396
million from a prior view of $391 million-$395 million.
Semtech (SMTC +1.29%) gained over 2% in after-hours
trading after it reported Q2 adjusted EPS of 35 cents, higher than consensus of
33 cents.
Ollie's Bargain Outlet
Holdings (OLLI -1.17%)
climbed 6% in after-hours trading after it reported Q2 adjusted EPS of 21
cents, better than consensus of 18 cents, and then raised guidance on full-year
adjusted EPS to 88 cents-90 cents
from a prior view of 85 cents-87 cents.
salesforce.com (CRM -0.51%) tumbled over 8% in after-hours
trading after it said it sees Q3 adjusted EPS of 20 cents-21 cents, below consensus of 24 cents.
Shoe Carnival (SCVL +0.64%) fell nearly 6% in after-hours
trading after it reported Q2 EPS of 22 cents, weaker than consensus of 27
cents, and then said it sees fiscal year comparable sales up +1.5% -2.0%, below a May 19 view of up 1% to
3%.
Impinj (PI +0.31%) rose 5% in after-hours trading
after it reported Q2 adjusted EPS of 6 cents, double consensus of 3 cents.
Five Below (FIVE -0.56%) slid over 4% in after-hours
trading after it reported Q2 comparable sales rose +3.1%, below consensus of
+3.4%.
Oxford Industries (OXM -2.01%) jumped nearly 10% in
after-hours trading after it reported Q2 adjusted EPS continuing operations of
$1.48, better than expectations of $1.38. The Total Investment & Insurance Solutions
Sep E-mini S&Ps (ESU16 +0.15%) this morning are up +3.50
points (+0.16%). Wednesday's closes: S&P 500 -0.24%, Dow Jones -0.29%, Nasdaq-0.10%. The S&P 500
on Wednesday closed lower on the -4.3 point decline in the Aug Chicago PMI
to 51.5, weaker than expectations of -1.8 to 54.0. There was also weakness in
energy producer stocks as crude oil tumbled -3.56% to a 2-week low. In addition, there was
increased concern about a Fed rate hike after the Aug ADP employment report
showed an increase of +177,000 and July was revised upward to +194,000 from
+179,000.
Dec 10-year T-notes (ZNZ16 -0.16%) this morning are down -8 ticks.
Wednesday's closes: TYZ6 unch, FVZ6 +0.50. Dec T-notes on Wednesday closed
little changed. T-note prices were undercut by the slightly
larger-than-expected increase in the Aug ADM employment report of +177,000 and
by the stronger-than-expected U.S. July pending home sales report. T-notes
received a boost from the slide in stocks and the weaker-than-expected Aug
Chicago PMI.
The dollar index (DXY00 -0.03%) this morning is down -0.033 (-0.03%). EUR/USD (^EURUSD)
is down -0.0009 (-0.08%). USD/JPY (^USDJPY)
is up +0.26 (+0.25%) at a new 1-month high. Wednesday's closes: Dollar index -00324 (-0.03%), EUR/USD +0.0015 (+0.13%),
USD/JPY +0.47 (+0.46%). The dollar index on Wednesday climbed to a 3-week high
but fell back and closed slightly lower. The dollar was boosted by the
stronger-than-expected Aug ADP employment change and weakness in the yen after
USD/JPY soared to a 1-month high on expectations for further BOJ stimulus
measures in September. The dollar shed its advance after the Aug Chicago PMI
fell more than expected.
Oct crude oil (CLV16 -0.13%) this morning is down -3 cents
(-0.07%) and Oct gasoline (RBV16 -0.94%)
is down -0.0124 (-0.93%). Wednesday's closes: CLV6 -1.65 (-3.56%), RBV6 -0.0356 (-2.59%). Oct crude oil and gasoline
on Wednesday sold off to new 2-week lows and closed lower. Crude oil prices
were undercut by the rally in the dollar index to a 3-week high and the +2.28
million bbl increase in EIA crude inventories, more than expectations of +1.5 million
bbl.The Total Investment &
Insurance Solutions
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