Five tax saving funds that have given stellar returns in the past 5 years-The Total Investment & Insurance Solutions

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3^rd February  2018

ELSS(The Total Investment & Insurance Solutions)

Bloodbath on stock market; Sensex sheds over 800 points-Weekly report-The Total Investment & Insurance Solutions

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2 February  2018

I had mentioned in last Friday’s closing report that Nifty, Sensex might go sideways. The major indices of the Indian stock markets saw volatility in the week’s trading and closed on Friday with significant losses over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:

 

Weekly Indices (The Total Investment & Insurance Solutions)

The major indices of the Indian stock markets rallied on Monday and closed with gains over Friday’s close. On the NSE, there were 427 advances, 1,086 declines and 27 unchanged.  Optimism ahead of the tabling of the Economic Survey 2017-18 in Parliament, along with buying in auto, metals and banking stocks, lifted the key Indian equity indices to trade at fresh high levels on Monday. According to market observers, positive global cues, coupled with the expectation of sops from the Union Budget 2018-19, lifted investors' risk-taking appetite.

The Economic Survey 2017-18 tabled in Parliament on Monday said that resolving the non-performing assets (NPAs), or bad loans, of state-run banks and implementing GST are among the major factors that will aid India log GDP growth of 6.75% in the current fiscal, the Economic Survey for 2017-18 tabled in the Lok Sabha by Finance Minister Arun Jaitley on Monday, has said. 

The Future Group on Friday said it has acquired Jasper Infotech-owned Snapdeal's logistics arm Vulcan Express at Rs35 crore. "Jasper Infotech, which also owns Snapdeal... has entered into an agreement with Future Supply Chain Solutions... to sell 100% stake in Vulcan Express Pvt Ltd in an all-cash deal valued at Rs35 crore," a Future Group statement said. 

The major indices of the Indian stock markets suffered a correction on Tuesday and closed with losses over Monday’s close. On the NSE, there were 334 advances, 1,202 declines and 29 unchanged. Weak global cues coupled with selling pressure in consumer durables, banking and IT (information technology) stocks pulled the key Indian equity indices lower on Tuesday.

State-run India Oil Corp (IOC) on Tuesday declared a near doubling in its net profit at Rs7,883.22 crore for the third quarter ended in December over the same period last year, mainly on the back of higher sales. The company had reported a net profit of Rs3,994.91 crore in the same quarter of the last fiscal.  The rise was even sharper sequentially with the oil marketing company (OMC) posting a profit after tax of Rs3,696 crore in the previous quarter.  IOC's revenue for the quarter in consideration increased to Rs1,30,865 crore as compared to Rs1,15,630 crore in the corresponding quarter of 2017, the company said in a stock exchange filing following a meeting of its board of directors. The OMC posted a higher gross refining margin (GRM), on converting each barrel of crude to petroleum products, for the April-December period of the fiscal at $8.28 per barrel as against the GRM of $7.36 for the same nine months of 2017. The refiner said it has accounted for a lower budgetary support of Rs2,249.92 crore for the first nine months of the current fiscal (April-December), compared to Rs3,879.73 crore received in the corresponding period of 2017. Indian Oil said that during the first quarter it settled its liability for entry tax in Haryana. 

Housing finance major HDFC said that its standalone net profit during the third quarter of 2017-18 increased to Rs5,670 crore. According to the company, its standalone net profit during the quarter under review included the proceeds from the IPO of HDFC Life. The company had reported a net profit of Rs1,701 crore for the corresponding period of the previous fiscal. "In the quarter ended December 31, 2017, the Corporation received Rs5,250 crore (net of estimated expenses, which are yet to be fully crystallised) from the initial public offer (IPO) of HDFC Standard Life Insurance Company Limited (HDFC Life)," HDFC said in a statement.  "The Corporation also created an additional special provision (as a charge to the statement of profit and loss) of Rs1,575 crore, being 30% of the pre-tax gains on this transaction, thereby building an additional buffer against any unexpected risk in the future." 

The major indices of the Indian stock markets were range-bound on Wednesday and closed with minor losses over Tuesday’s close. On the NSE, there were 641 advances, 1,088 declines and 292 unchanged. Key Indian equity indices traded in the red on Wednesday, with the Sensex slipping below the psychologically important 36,000-mark and the Nifty50 below the 11,000-level. 

FMCG (fast moving consumer goods) major Dabur India on Wednesday reported a rise of 13.02% in its consolidated net profit for the third quarter (Q3) ended December 31, 2017. The company's consolidated net profit for Q3 stood at Rs333.03 crore as compared to the net profit of Rs294.67 crore reported during the corresponding period of the last fiscal. For the quarter under review, the total income of the FMCG major was reported at Rs2,032.78 crore -- up 5% -- from Rs1,935.97 crore posted during Q3 2016-17. 

The major indices of the Indian stock markets witnessed a highly volatile trading on Thursday, the day of the Union Budget, and closed with losses over Wednesday’s close. On the NSE, there were 694 advances, 849 declines and 28 unchanged. There were selling pressures in consumer durables, banking and healthcare stocks. At one point, both the indices plunged after Finance Minister Arun Jaitley announced in his Budget speech that the long-term capital gains (LTCG) tax rate was 10% for gains exceeding Rs1 lakh. Rationalisation of LTCG as expected has arrived, though negative on market sentiments but robust equity returns would absorb this 10%, if corporate earnings growth would happen as expected, market analysts observed.

The barometer Sensex of the BSE plunged more than 800 points on Friday as the re-introduction of long-term capital gains (LTCG) tax for investing in equities finally sunk in. The Nifty50 too, slipped over 250 points. According to market observers, selling pressure in consumer durables, banking, capital goods, auto and metals stocks added to the downward trajectory of the indices.

On Friday, Just Dial and PC Jewellers slumped 12.34% and 25.15% respectively, its steepest fall since one month, pointed out market analysts. Information Technology stocks, however, traded higher. Tech Mahindra was the top gainer on the NSE at 0.99% to close at Rs617.10.The Total Investment & Insurance Solutions

Why is the Budget silent on bulging NPAs of banks, asks AIBEA-The Total Investment & Insurance Solutions

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2 February  2018

 

AIBEA (The Total Investment & Insurance Solutions

Huge bad loans in banks is a big problem, but there is nothing much about  recovering non-performing assets (NPAs) in the Budget, except for measures to tackle NPAs of micro, small and medium enterprises (MSMEs), presented by Finance Minister Arun Jaitley, says a bank union. 

In a statement, CH Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA), says, "The recovery of piling bad loans of the public sector banks has not been addressed in the Budget. AIBEA has been demanding stringent measures to recover the huge bad loans, particularly from the corporate defaulters. But no concrete measures have been announced. Already, there are indications that under the Insolvency proceedings, Banks are going to suffer deep haircut and huge sacrifice. But still, no other effective measures have been announced."

  

According to data furnished by Reserve Bank of India (RBI) and the government, by September 2017 end, NPAs, or bad loans, of state-run banks amounted to a staggering Rs7.34 lakh crore. NPAs of private sector banks, however, stood at a much lower level of around Rs1.03 lakh crore by the end of the July-September quarter.

Leading corporate entities and companies accounted for around 77% of the total gross NPAs of banks from domestic operations, a statement issued by the Finance Ministry had said.  

AIBEA says it has been demanding for periodical publication of names of loan defaulters by amending the RBI Act, but it has been deliberately avoided. "This shows that Government wants to protect the corporate companies because of election funds," it said. 

  

The bank employee union has also been demanding to define wilful loan default as a criminal offence. However, this also has been ignored indicating the nexus and vested interests, AIBEA says.

In June 2017, the RBI identified 12 NPA cases. Later it came out with a second list comprising of about 28 accounts worth over Rs1.5 lakh crore, to be taken to the National Company Law Tribunals (NCLTs) for resolutions under the Insolvency and Bankruptcy Code (IBC).

  

According to the union, there is also no indication that the Financial Resolution and Deposit Insurance (FRDI) Bill will not be pursued thus attempts are afoot to utilise the people's money to whitewash corporate delinquency. "Today total deposits with the banks is around Rs110 lakh crore. We need to protect this precious money of the common people of the country. Total deposits in the banks should be fully protected and guaranteed," Mr Venkatachalam said. 

Earlier, in a report, CARE Ratings had pointed out that India's NPAs are growing rapidly and the country was at fifth spot in terms of high NPAs across the world. “India features very high up the order and is lower than only Portugal, Italy, Ireland and Greece. Quite clearly, the Insolvency and Bankruptcy Code (IBC) and National Company Law Tribunal (NCLT) have its task cut out to lower these numbers and make the system more robust,” the research note had said.

The seriousness of the NPA problem can be gauged by the absolute level of impaired assets in the system. “Ever since the Reserve Bank of India (RBI) had spoken of asset quality recognition (AQR) in 2015, there was an increase in the pace of recognizing these assets. It is not clear whether all have been recognised as yet, though judging from the trends witnessed so far, it does appear that the cleaning up operation on this score would be completed by March 2018. From there on, it would be more a case of incremental NPAs being generated on account of other factors rather than one of recognition by banks,” the report had stated.The Total Investment & Insurance Solutions

Sebi might mandate large corporates to raise funds through bond market-The Total Investment & Insurance Solutions

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2 February  2018

 

SEBI (The Total Investment & Insurance Solutions)

Securities market regulator Sebi might mandate large corporates to meet about one-fourth of their financing needs through the bond market.

"Reserve Bank of India has issued guidelines to nudge corporates access bond market," Finance Minister Arun Jaitley said in his Budget 2018-19 speech on Thursday. 

"SEBI will also consider mandating, beginning with large corporates, to meet about one-fourth of their financing needs from the bond market."

According to Jaitley, corporate bonds rated ‘A' grade would be permitted as eligible for investment. 

"Corporate bonds rated ‘BBB' or equivalent are investment grade. In India, most regulators permit bonds with the ‘AA' rating only as eligible for investment," Jaitley said.

"It is now time to move from ‘AA' to ‘A' grade ratings. The government and concerned regulators will take necessary action."The Total Investment & Insurance Solutions

Amendments moved to give more teeth to anti-money laundering act-The Total Investment & Insurance Solutions

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2 February  2018

 

Bank (The Total Investment & Insurance Solutions)

The government on Thursday sought to amend the Prevention of Money Laundering Act (PMLA), 2002 aiming to widen its scope by providing for action against property, equivalent to proceeds of crime, held outside the country.

So far, the government could only proceed against property held within the country.

The amendments made through the Finance Act, 2018 would also take care of certain procedural difficulties faced by the Enforcement Directorate (ED) in prosecution of PMLA cases.

The definition of "proceeds of crime" in PMLA was amended in 2015 to include "property equivalent held within the country" in case proceeds of crime is taken out or held "outside the country", an official statement said. 

It added that the present amendment would allow the government to proceed against property acquired abroad.

The government had also proposed to include corporate frauds as scheduled offence under PMLA so that Registrar of Companies in suitable cases would be able to report such cases for action by the ED under the PMLA provisions.

"This provision shall strengthen the PMLA with respect to corporate frauds."

The government also sought to make the applicability of bail conditions uniform to all the offences under PMLA, instead of only those offences under the schedule which are liable to imprisonment of more than three years.

"This will be a significant step forward in delinking the proceedings against scheduled offences and money laundering offences under PMLA," it said.

"Section 5(1) of the Act provides that every order of provisional attachment passed by an officer of the ED shall cease to have effect after 180 days from the date of the provisional attachment order, unless confirmed by the adjudicating authority under PMLA within that period. 

"The section is proposed to be amended to include the period of stay in this time limit of 180 days and also further period of not more than 30 days to take care of delays if any in communication of judicial orders," it added.The Total Investment & Insurance Solutions

Solid US Jobs Figures Leave Downbeat Markets Unmoved-The Total Investment & Insurance Solutions

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2 February  2018

Hong kong financial markets (The Total Investment & Insurance Solutions)

Solid U.S. jobs data on Friday did little to improve the mood in global stock markets as investors continued to worry about rising U.S. bond yields.

KEEPING SCORE: In Europe, Germany's DAX was down 1.4 percent at 12,825 while the FTSE 100 index of leading British shares fell 0.3 percent to 7,465. France's CAC 40 was 1.2 percent lower at 5,389. U.S. stocks were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.6 percent.

JOBS DATA: U.S. employers added a robust 200,000 jobs in January, slightly above market expectations for a 185,000 increase. Meanwhile wages rose at the fastest pace in more than eight years, suggesting employers are competing more fiercely for workers. The figures point to an economy on strong footing even in its ninth year of expansion, fueled by global economic growth and healthy consumer spending at home.

FED IMPLICATIONS: The pickup in hourly wages, along with a recent uptick in inflation, may make it more likely the Federal Reserve will raise short-term interest rates more quickly in the coming months. The yield on U.S. 10-year Treasury notes, the benchmark for interest rates, has risen swiftly, stoking investor concerns that higher rates could weigh on company earnings and equity prices. This week yields hovered at their highest level since April 2014, fueled by the prospect of stronger economic growth in the U.S. and abroad.

ANALYST TAKE: "A 3 percent 10-year Treasury yield is a footstep away," said Neil MacKinnon, chief macro economist at VTB Capita. "The return of wage inflation will be central now."

DEUTSCHE DOWN: Shares in Germany's biggest bank, Deutsche Bank, fell sharply after full-year results showed it still struggling to turn solid profits after years of wrenching restructuring and legal trouble. Its share price was 5.3 percent lower at 13.99 euros.

SONY BOSS: The Japanese electronics and entertainment company tapped its chief financial officer to take over as president and CEO, taking over from Kazuo Hirai, who is stepping down after orchestrating a turnaround.

ASIAN SCORECARD: Japan's benchmark Nikkei 225 sank 0.9 percent to close at 23,274.53 and South Korea's Kospi fell 1.7 percent to 2,525.39. Hong Kong's Hang Seng index dipped 0.1 percent to 32,601.78 but the Shanghai Composite index recouped early losses in the final hour to close 0.4 percent higher at 3,462.08.

ENERGY: Oil futures extended gains, with benchmark U.S. crude climbing 15 cents to $65.95 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 25 cents to $69.40 per barrel in London.

CURRENCIES: The euro fell 0.4 percent to $1.2459 while the dollar rose 0.8 percent to 110.23 yen.The Total Investment & Insurance Solutions

Nifty, Sensex May Struggle to Head Higher – Thursday closing report -The Total Investment & Insurance Solutions

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1 February  2018

I had mentioned in Wednesday’s closing report that Nifty, Sensex were looking dicey. The major indices of the Indian stock markets saw volatile trading on Thursday, but closed with minor losses over Wednesday’s close. On the NSE, there were 694 advances, 849 declines and 28 unchanged. The trends of the major indices in the course of Thursday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

Amid much volatility on Thursday as the Union Budget 2018-19 was presented, the key Indian equity indices closed trade in the red with selling pressure in consumer durables, banking and healthcare stocks. The BSE market breadth was bearish with 1,454 declines and 1,324 advances.

At one point, both the indices plunged after Finance Minister Arun Jaitley announced in his Budget speech that long-term capital gains (LTCG) tax rate at 10% for gains exceeding Rs1 lakh. Rationalisation of LTCG as expected has arrived, though negative on sentiments but robust equity returns will absorb this 10% if corporate earnings growth happen as expected, market analysts observed.

Two-wheeler maker Eicher Motors Ltd and car maker Toyota Kirloskar Motor on Thursday said they have logged higher sales volume in January as compared to January 2017. In a statement, Eicher Motors said it sold 77,878 units in January, up from 59,676 in January last year. According to Eicher Motors, it has sold 671,328 units till last month, this fiscal logging 23% growth over same period last fiscal. Toyota Kirloskar said it sold 13,329 units last month, up from 11,252 units in January 2017. “It is a delight to usher in the New Year with a double digit growth. We are happy to have sustained the positive growth momentum post-GST. The customer demand has consistently been strong and we have catered to the growing customer demand," N Raja, Deputy Managing Director of Toyota Kirloskar, was quoted as saying in the statement. The shares of Eicher Motors closed at Rs28,047.35, up 4.78% on the NSE and the S & P BSE Auto Index closed at 26,119.52, up 0.67% on the BSE. The Total Investment & Insurance Solutions

Commercial vehicles major Ashok Leyland Ltd on Thursday said it closed last month with 13% growth in sales volume. In a statement issued here, the company said it sold 18,101 units last month, up from 14,872 units sold in January 2017. The company has sold a total of 1,34,240 units till last month this fiscal, up from 1,12,317 units sold during the previous year corresponding period. The company’s shares closed at Rs123.35, down 1.27% on the NSE.

Finance Minister Arun Jaitley on Thursday did not provide any relief in the income tax rates for 2018-19, but increased the cess levied on it by 1% to raise Rs11,000 crore. "The government had made many positive changes in the personal income-tax rate applicable to individuals in the last three years," Jaitley said in his Budget speech. "Therefore, I do not propose to make any further change in the structure of the income tax rates for individuals." With salaried individuals left at the same tax rates, the assets under management of mutual funds are likely to maintain a long term bullish trend.

The Finance Minister said the government would formulate a comprehensive Gold Policy to develop the precious metal as an asset class. The government had been planning to formulate a Gold Policy for long to set standard norms in the industry. "The government will also establish a system of consumer friendly and trade efficient system of regulated gold exchanges in the country," Jaitley said while announcing the Union Budget 2018-19. Talking about the government's Gold Monetisation Scheme, he said it would be revamped to enable people to open a hassle-free Gold Deposit Account. 

The top gainers and top losers of the major indices are given in the table below: The Total Investment & Insurance Solutions

 

Top Gainer (The Total Investment & Insurance Solutions)

The closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions

Asian Indices (The Total Investment & Insurance Solutions)

Fiscal deficit target for 2017-18 revised upwards to 3.5% or Rs 5.9 lakh cr-The Total Investment & Insurance Solutions

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1 February  2018

 

fiscal developments (The Total Investment & Insurance Solutions)

In a significant admission of fiscal slippage with implications for pushing inflation, the government on Thursday revised upwards its fiscal deficit target for 2017-18 to 3.5 per cent of the GDP, or the equivalent of Rs 5.9 lakh crore.

The announcement of a higher target, in place of the 3.2 per cent for the current fiscal announced earlier, was made by Finance Minister Arun Jaitley while presenting the Budget 2018-19 in the Lok Sabha. This is the last full budget of the NDA government before the general elections expected to be held in the first half of 2019.The Total Investment & Insurance Solutions

"The revised estimate of fiscal deficit for 2017-18 is at Rs 5.9 lakh crore, or at 3.5 per cent (of GDP)," Jaitley said, explaining that a main cause of the fiscal slippage was that indirect tax revenues after the introduction of the Goods and Services Tax were only available for 11 months of the current fiscal. 

"There has been a shortfall also in non tax revenue, part of which has been made up by higher direct tax collections and higher disinvestment income this year," he said. The Total Investment & Insurance Solutions

The Finance Minister placed the revised extimate of government expenditure for the fiscal at Rs 21.57 lakh crore against the earlier budget estimate of Rs 21.47 lakh crore. The Total Investment & Insurance Solutions

The Finance Ministry's Economic Survey 2017-18 authored by Chief Economic Advisor (CEA) Arvind Subramanian released on Monday had said that ambitious targets of fiscal consolidation for the coming pre-election year be avoided, hinting thereby that the target of 3.2 per cent of the GDP could be exceeded.

"Reflecting largely fiscal developments at the Centre, a pause in general government fiscal consolidation relative to 2016-17 cannot be ruled out," said the Survey. The Total Investment & Insurance Solutions

99% MSMEs to gain by tax incentives provided in Budget FY18-19-The Total Investment & Insurance Solutions

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1 February  2018

 

FM Arun Jaitley(The Total Investment & Insurance Solutions)

FM Arun Jaitley has proposed a reduced rate of 25% to companies that have reported turnover up to Rs250cr in financial year 2016-17. This will benefit the entire class of Micro, Small and Medium Enterprises which accounts for almost 99% of companies filing their tax returns.

Accepting Rs7,000cr as the estimated revenue forgone due to this measure during the financial year 2018-19, the Finance Minister, while presenting the General Budget 2018-19 in Parliament said, “This is towards fulfilment of my promise to reduce corporate tax rate in a phased manner.”

He further added, “The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs.” The Total Investment & Insurance Solutions

The Finance Minister recalled that in the Union Budget 2017, he had announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs50cr in financial year 2015-16. This had benefitted 96% of the total companies filing tax returns. The Total Investment & Insurance Solutions

The Finance Minister also said that after this measure, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs250cr will remain in 30% slabThe Total Investment & Insurance Solutions