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

E-way bill must for interstate goods movement from February 1 -The Total Investment & Insurance Solutions

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1 February  2018

 

E-Way Bill (The Total Investment & Insurance Solutions)

The e-way bill, to be generated under the GST for all inter-state movement of goods valued at over Rs 50,000, will become mandatory from Thursday, on the day of the presentation of the Union Budget 2018-19 in Parliament.

The implementation of this electronic documentation system, to track the movement of goods and designed to prevent tax evasion, was put on hold until after the Goods and Services Tax (GST) stabilised following the rollout of the new indirect tax regime from July 1 last year.

All states and union territories, except Lakshadweep, have joined the e-way bill system, according to the GST Network (GSTN) officials here, while 13 states have signed up for the intra-state part of the system.

The e-way bill will also become mandatory for all movement of goods within a state from June 1. The Total Investment & Insurance Solutions

The officials said that during the 14 day trial period starting from January 17, transporters have generated 28.4 lakh e-way bills, with 3.4 lakh of these being generated on January 30 alone. During this period, 11,581 transporters registered themselves under the system.The Total Investment & Insurance Solutions

Global Markets Mixed After Fed Keeps Rate Unchanged-The Total Investment & Insurance Solutions

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1 February  2018

South korea financial markets (The Total Investment & Insurance Solutions)

Global markets were mixed on Thursday. European stocks were higher while Chinese markets finished with loses after the U.S. Federal Reserve left its benchmark interest rate unchanged. The Total Investment & Insurance Solutions

KEEPING SCORE: Britain's FTSE 100 added 0.1 percent to 7,539.81 while France's CAC 40 gained 0.6 percent to 5,514.52. Germany's DAX advanced 0.4 percent to 13,238.47. Futures augured a tepid start on Wall Street with Dow futures up less than 0.1 percent and S&P futures up 0.2 percent.

ASIA'S DAY: Asian markets finished mixed. Japan's Nikkei 225 jumped 1.7 percent to 23,486.11 and South Korea's Kospi added 0.1 percent to 2,568.54. But Hong Kong's Hang Seng index fell 0.8 percent to 32,642.09 and China's Shanghai Composite Index sank 1 percent to 3,446.98. Australia's S&P/ASX 200 rose 0.9 percent to 6,090.10. Stocks in Southeast Asia were higher.

ANALYST'S TAKE: "Fed Chair Janet Yellen's last meeting prior to stepping down saw the Fed reinforcing their positive outlook over both the economy and inflation while unanimously voting to keep rates unchanged," Jingyi Pan, a market strategist at IG in Singapore, said in a daily commentary.

FED RATE: The Fed kept its key rate in a still-low range of 1.25 percent to 1.5 percent and said in a statement that it expects inflation to finally pick up this year, stabilizing around the Fed's target level of 2 percent. The Fed also indicated that it thinks the job market and the overall economy are continuing to improve.

OIL: Benchmark U.S. crude rose 48 cents to $65.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 23 cents to settle at $64.73 per barrel on Wednesday. Brent crude, used to price international oils, advanced 49 cents to $69.38 per barrel in London.

CURRENCIES: The dollar rose to 109.57 yen from 109.20 yen. The euro strengthened to $1.2443 from $1.2411.The Total Investment & Insurance Solutions

Nifty, Sensex Looking Dicey – Wednesday closing report-The Total Investment & Insurance Solutions

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31 January  2018

I had mentioned in Tuesday’s closing report that Nifty, Sensex were looking overextended. 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. The trends of the major indices in the course of Wednesday’s trading are given in the table below:

 

Major Indices (The Total Investment & Insurance Solutions)

Key Indian equity indices traded in the red during the mid-afternoon session on Wednesday, with the Sensex slipping below the psychologically important 36,000-mark and the Nifty50 below the 11,000-level. According to market observers, negative global cues, coupled with selling pressure in consumer durables, capital goods and healthcare stocks, pulled the key Indian equity indices lower for the second consecutive session. Besides, investors turned cautious and booked profits ahead of the presentation of the Union Budget 2018-19 on Thursday. The Total Investment & Insurance Solutions

Diversified conglomerate Piramal Enterprises reported an increase of 21% in its consolidated net profit for the third quarter of 2017-18 financial year. According to the company, its net profit during the quarter under review increased to Rs490 crore from Rs404 crore reported for the corresponding period of the previous fiscal. Further, the consolidated revenues grew by 22% to Rs2,858 crore from Rs2,342 crore in Q3 2016-17. "We continue to deliver strong performance since last many quarters. The consistency in our performance is an outcome of the robustness of our business model and sharp focus on quality, compliance, legal and risk mitigation across our businesses," said Ajay Piramal, Chairman, Piramal Enterprises. The shares of the company closed at Rs2,743.00, down 0.58% on the NSE. The Total Investment & Insurance Solutions

Two-and three-wheeler manufacturer TVS Motor Company reported a rise of 16.3% in its net profit for the third quarter of 2017-18. According to the company, its net profit during the quarter under review increased to Rs154.35 crore from Rs132.67 crore reported for the corresponding period of the previous fiscal. "During the quarter ended December 2017, the overall two-wheeler sales of the company including exports grew by 13.8% to 7.99 lakh units...," the company said in a statement. "Three-wheeler sales of the company registered a growth of 67.7% to 26,968 units in the quarter under review as against 16,081 units in the third quarter of 2016-17." Further, the company exported 1.40 lakh units of two and three wheelers in the quarter under review as against 0.99 lakh units in the third quarter of 2016-17 registering a growth of 42.4%. The shares of the company closed at Rs697.00, down 2.37% on the NSE.

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. "In a challenging business environment, Dabur India delivered a strong overall performance to end the third quarter of 2017-18 with a comparable India FMCG revenue growth of 17.7%," the company said in a statement. According to the company, the domestic FMCG business reported an underlying volume growth of 13% during the quarter. On a stand-alone basis, the net profit for Q3 FY18 rose by 15.9% to Rs265.47 crore from Rs229.01 crore during the like period of last fiscal. The total income was reported at Rs1,509.89 crore -- up 11.05% -- from Rs1,359.69 crore posted during Q3 FY17. Dabur shares closed at Rs356.50, down 0.59% on the NSE.

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:

Asian Indices (The Total Investment & Insurance Solutions)

CEA much less hopeful now of RBI rate cuts-The Total Investment & Insurance Solutions

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31 January  2018

 

CEA (The Total Investment & Insurance Solutions)

Sounding a clear note of caution on rising crude oil prices pushing inflation, Chief Economic Advisor (CEA) Arvind Subramanian has toned down his earlier vocal expectation of a rate cut by the Reserve Bank of India (RBI) ahead of the central bank's final bi-monthly monetary policy review of the fiscal due to be annouced next week. The Total Investment & Insurance Solutions

In an interview here with CNBC TV18 following the release of the Economic Survey 2017-18 authored by him, Subramanian said that with retail inflation edging past the RBI's median target of 4 per cent, the "cycle has turned".

"Relative to the last 18 months when we consistently undershot our inflation target, now we are at or close to that. So clearly, the case for easing is now less persuasive...we seem to be close to the inflation target," he said. 

At the fiscal's penultimate policy review in Mumbai last month, the RBI maintained the status quo on its key lending rate for the third time in succession at 6 per cent, citing concerns on the rising trajectory of inflation. The central bank also raised the inflation forecast for the remainder of the current fiscal to 4.3-4.7 per cent. The Total Investment & Insurance Solutions

The continuing rise in food and fuel prices pushed India's annual retail inflation rate over the five per cent mark in December, to 5.21 per cent, from 4.88 per cent in November. The Total Investment & Insurance Solutions

In this connection, the CEA hinted that the government's fiscal deficit target of 3.2 per cent of the gross domestic product (GDP) could be exceeded this year in the lead up to the 2019 general elections.

"May involve a bit of a (fiscal) slippage, may not, we will have to see but that is for this year. For next year, I have said three things. One the fact that it is an election year does not mean fiscal populism and I think everyone is on board, no fiscal populism," he said. The Total Investment & Insurance Solutions

"The second point made very clearly is that if you look at the pure economic cycle now, you would in-principle and I would argue for an ambitious fiscal consolidation on economic grounds because inflation is higher, output is higher, output gaps are closing, and there is more volatility and external uncertainty and therefore, consolidation," he added. The Total Investment & Insurance Solutions

The Economic Survey cautioned that ambitious targets of fiscal consolidation for the pre-election year be avoided. The Total Investment & Insurance Solutions

"Reflecting largely fiscal developments at the Centre, a pause in general government fiscal consolidation relative to 2016-17 cannot be ruled out," it said. 

On the most disruptive measure since Independence -- demonetisation, which, along with GST, "decoupled" the Indian economy from the rest of the world for around four to six quarters -- the Survey said that carrots rather than sticks should be the mainstay of government policy in cleaning up the economy.

"I think both in terms of the informal sector, of exports, also GST, there were transitional costs (of demonetisation). I think no one can deny that, but let us see the other side of the ledger, what the benefits are going to be," Subramanian said. The Total Investment & Insurance Solutions

Low-cost, long-haul flights by Indian airlines to boost foreign travel-The Total Investment & Insurance Solutions

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31 January  2018

Flight (The Total Investment & Insurance Solutions)

The launch of low-cost, long-haul flights by Indian airlines will boost outbound leisure travel and open a multi-billion dollar opportunity for carriers, a report released on Wednesday showed. The Total Investment & Insurance Solutions

The analysis by aviation consultant CAPA India and online travel agent Expedia Inc comes as large budget airlines IndiGo and SpiceJet Ltd draw up plans to fly as far as Europe and the United States.

The carriers have so far focused on shorter-range destinations such as Sri Lanka and Thailand. The Total Investment & Insurance Solutions

Only 0.3 percent of Indians currently travel abroad for a holiday every year, a fraction of the estimated 100 million who could potentially afford to do so, CAPA`s analysis of household income shows. Most Indians travel for education, business or to visit friends and relatives.

Tourism spending by Indians could rise to as much as $40 billion by 2027 from about $16.4 billion in 2016, CAPA said, ranking it sixth in the world ahead of Canada, South Korea and Australia.

"If there is any market where low-cost, long-haul can work it is India," CAPA India CEO Kapil Kaul said at an aviation conference in Mumbai on Tuesday, citing its geographic location and a large order pipeline for new long-range narrowbody jets. The Total Investment & Insurance Solutions

SpiceJet Chairman Ajay Singh said on Tuesday low-cost long haul flights will be introduced as early as this winter.

IndiGo is exploring long-haul operations and seeking rights to routes, parent InterGlobe Aviation Ltd told analysts last week.

The low-cost flights would compete against full-service Indian carriers Air India and Jet Airways as well as global rivals such as Emirates and Lufthansa.

 BUDGET GROWTH

Low-cost carriers, launched in the early 2000s, already dominate domestic air travel with a two-thirds market share.

The share of budget airlines in the international market rose to about 23 percent in the fiscal year 2016/17 from 14.5 percent five years earlier, CAPA estimates.

That is expected to rise as Indian airlines have placed orders for nearly 800 re-engined aircraft, such as Airbus A320neos and Boeing Co 737 MAX narrowbodies. The Total Investment & Insurance Solutions

The jets, with longer ranges than predecessors, will enable low-cost carriers to launch non-stop routes to Asian destinations such as Phuket, Manila, Hong Kong, and Hanoi that are otherwise unviable today.

By 2025, Indian budget carriers will operate close to 40 wide-bodied aircraft, which could deliver an additional 2 million annual outbound leisure travellers to places such as New York and Sydney, CAPA said.

 Low-cost carriers AirAsia India and Vistara, a full-service joint venture between Singapore Airlines and India`s Tata Group, are expected to launch their first international flights later this year.The Total Investment & Insurance Solutions

Pressure on pharma companies as US President wants cut in the drug prices-The Total Investment & Insurance Solutions

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31 January  2018

 

Pharma (The Total Investment & Insurance Solutions)

Pharma stocks are likely to see more volatility after US President, Donald Trump said that cutting drug prices is one of the greatest priorities for his administration. He has proposed speedy approval of new drugs, which is likely to bring fresh and likely intense competition in the existing drugs.

Time and again, President Trump has talked about the higher drug costs in the US. Last year, after the appointment of new USFDA commissioner Scott Gottlieb, the USFDA approved record number of drugs, taking the advantage of key policy changes in the recent years. These record drug approvals (including generics) led to increase the competition. While innovator pharma companies were the main targets, generic companies also started to face growth slowdown and margin pressures due to the record no. of ANDA approvals. The growth slowdown led to decline in the share prices of the pharma companies. The competition pressure will continue and as approval pace sustains, the pressure does not seem to abate, at least in 2018-19.

President Trump spoke about lowering the prescription drug prices and has mentioned that is the highest priority. He has also indicated that higher drug prices in the US is an unfair practice considering that these same drugs cost far less in the other countries. As part of his objective to achieve this goal, he has appointed a new Health and Human Services (HHS) secretary, Alex Azar.

Health and Human Services is a department of the US government, which protects the health of all Americans and provides essential human services.

Alex Azar has indicated of pulling down the list prices of the drugs. He is also likely to continue encouraging development of more generic drugs and increased drug price negotiations to make medicines affordable. This means, reduced drug prices and more competition, a double whammy for the pharma companies, both innovator and generics.The Total Investment & Insurance Solutions

Global Stocks Stabilize After Wall Street's Sharp Decline-The Total Investment & Insurance Solutions

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31 January  2018

China financial markets (The Total Investment & Insurance Solutions)

Global stock markets stabilized Wednesday after Wall Street recorded its biggest decline since August the day before, and as investors looked ahead to the Federal Reserve's policy statement. The Total Investment & Insurance Solutions

KEEPING SCORE: Germany's DAX rose 0.2 percent to 13,222 and France's CAC 40 gained 0.3 percent to 5,488 after new figures showed the eurozone's inflation rate fell, suggesting the European Central Bank may not be hasty in withdrawing its program. London's FTSE 100 fell 0.1 percent to 7,582. On Wall Street, futures for the Dow Jones industrial average rose 0.6 percent and those for the Standard & Poor's 500 were up 0.4 percent. The Total Investment & Insurance Solutions

WALL STREET: Losses in health care and technology companies led U.S. stocks sharply lower. The slide erased some of the gains the market had racked up since the beginning of the year, though the market was still on track to close out January with a gain. The S&P fell 1.1 percent — its steepest one-day drop since Aug. 17. The Dow had its biggest decline since May, losing 1.4 percent. The Nasdaq slumped 0.9 percent. The Total Investment & Insurance Solutions

US FOCUS: The state of the union speech by President Donald Trump did little to sway markets but investors will keep an eye on the statement later by the Fed. The central bank is not expected to alter its policies in the last meeting before Chair Janet Yellen ends her term, but investors will keep an eye on its statement for any signs on how quickly it might raise interest rates in the future.

ASIA'S DAY: The Shanghai Composite Index lost 0.2 percent to 3,480.83 and Tokyo's Nikkei 225 fell 0.8 percent to 23,098.29. Hong Kong's Hang Seng rose 0.9 percent to 32,887.27 and Sydney's S&P-ASX 200 added 0.25 percent to 6,037.70. Seoul's Kospi shed 1.3 points to 2,566.46 and India's Sensex lost 0.5 percent to 35,863.61. Benchmarks in New Zealand, Taiwan and Bangkok rose while Singapore and Manila declined. The Total Investment & Insurance Solutions

MANUFACTURING: A monthly survey showed January factory activity in China was lower than expected. The purchasing managers' index of the official China Federation of Logistics & Purchasing declined to 51.3 from December's 51.6 on a 100-point scale on which numbers above 50 show activity expanding. However, Japan's factory output rose to a nine-year high in December.

ENERGY: Benchmark U.S. crude fell 41 cents to $64.09 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.06 on Tuesday. Brent crude, used to price international oils, declined 35 cents to $68.67 in London. It lost 68 cents in the previous session.

CURRENCY: The dollar edged up to 108.87 yen from 108.78 yen and the euro advanced to $1.2455 from $1.2403.The Total Investment & Insurance Solutions

Nifty, Sensex Looks Overextended – Tuesday closing report-The Total Investment & Insurance Solutions

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30 January  2018

I had mentioned in Monday’s closing report that Nifty, Sensex were on an uptrend. 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. The trends of the major indices in the course of Tuesday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

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. The Total Investment & Insurance Solutions

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. The company’s shares closed at Rs416.25, up 4.09% on the NSE. The Total Investment & Insurance Solutions

CK Birla Group's Birlasoft and KPIT will merge to create a $700 million company, which will later demerge into two separate IT entities focused on "digital business IT services" and "automotive engineering and mobility solutions". A statement released late on Monday said the new "Birlasoft" -- one of the two specialised companies that will be created at the conclusion of the deal -- would be a $500 million digital business IT services company. It said the new Birlasoft will be created by merging the KPIT ITSS (information technologies solutions and services) business with the current Birlasoft and will be led by Anjan Lahiri as the CEO and MD. According to the statement, the new "KPIT Technologies" will be a $200 million focused engineering services company that will be created by tapping into the current engineering business of KPIT to create a global leader in automotive engineering and mobility solutions, and will be led by Kishor Patil as the CEO and MD. "This company will deepen the relationship with global automotive and mobility leaders in fulfilling their engineering needs.  "The company will continue to enhance its expertise in all the features to deliver cleaner, safer and smarter solutions to the world of automotive and mobility," it said. The statement said during the period prior to the completion of the deal, Birlasoft and KPIT will continue to be run by their current managements, in addition to which management from both the companies will work together to familiarise Birlasoft with the ITSS business. KPIT shares closed at Rs219.35, up 4.73% on the NSE. The Total Investment & Insurance Solutions

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 company’s shares closed at Rs1,937.50, down 1.50% on the NSE. The Total Investment & Insurance Solutions

The top gainers and top losers of the major indices are given in the table below:

 

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)