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On Slack: Your Retirement Buys Stocks, No RS Majority, Overpriced Food at the Movies…

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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:

How big is STT?

0.125% of the whole contract (strike price + premium) x lot size.

STT or Securities Transaction Tax applies if you let an “in-the-money” option expire. It’s best to exit the option before 3:30 pm on expiry day, but if you do let it expire, that’s what it’s going to cost you.

More reading:https://www.capitalmind.in/2011/08/beware-of-stt-when-trading-options/

Another Crash Prediction: Is this bullish for stocks?

Mazhar Mohammad says “ Nifty may be on the verge of a bigger crash; May fall to 7200 in 3 to 5 months”

Your Provident Fund will buy Stocks, starting Tomorrow!

EPFO to invest over Rs8,000 crore in ETFs that reflect the Indian economy by the end of March 2016.

Further Reading:http://www.livemint.com/Politics/Zt14mjK3CJKcTDDR5PO5AL/EPFO-to-invest-5-of-its-corpus-in-stock-market.html

http://www.thehindubusinessline.com/markets/epfo-to-start-investing-in-equity-markets-through-etfs-on-august-6/article7485067.ece 

The BJP Might Not Get a Majority in the Rajya Sabha even in 2019

A detailed analysis shows us why the Rajya Sabha elections in 2016 and 2019 might not yield an NDA majority (needed for it to push through key bills) even in 2019 before the next LS elections:

 https://anamikabharatiya.wordpress.com/2014/10/20/89/

How the Modi govt lost the plot

More Reading: http://m.firstpost.com/politics/monsoon-washout-modi-govt-lost-plot-needs-now-2377868.html

“Modi May Have to Rethink Jaitley as Finance Minister”

Further Reading:

http://www.in.com/news/politics/gst-land-bill-on-hold-modi-may-have-to-rethink-jaitley-as-finance-minister-53216738-in-1.html

FDA Approved First Drug Made by a 3D printer

Pharma companies might find this exciting (if they’re going to do it) or scary (if they will get redundant) – but a printer has mixed enough molecules to get drug approvals from the FDA.

More Reading:http://qz.com/471030/the-fda-has-approved-the-first-drug-made-by-a-3d-printer/

RBI further eases project loan recast norms for NBFCs

Additional Reading:http://economictimes.indiatimes.com/news/economy/policy/rbi-further-eases-project-loan-recast-norms-for-nbfcs/articleshow/48287219.cms

More Reading: http://www.financialexpress.com/article/economy/draft-financial-code-proposes-committee-on-policy-rate/106293/

Except for India, Asian Manufacturing Continues to Slip

Additional Reading:http://blogs.barrons.com/asiastocks/2015/08/03/india-is-all-weve-got-manufacturing-in-korea-taiwan-china-continue-to-slip/

“Sourcing norms for single-brand retail likely to be reviewed”

  • Mandatory sourcing norms are the biggest hurdle for sing
    le-brand retailers and the government is willing to listen to the concerns
  • Apple and Ikea, apparently, met Commerce and Industry minister, Nirmala Sitharaman to discuss business prospects
  • Both companies seemed to have suggested an alternative route through which the government could achieve its objective of job generation, the backbone of the sourcing norms
  • This way, the companies will also not be compelled to compromise on quality of their products

“A steep fall in cotton prices helped the textile companies”

Indian Textile Industry Coming of Age

“Tough call for Tata Steel ; P/E for Steel is low at 3.88”

Further Reading:http://www.livemint.com/Companies/x55uCsaVbh6MKDFLtub1YM/Klesch-Group-pulls-out-of-Tata-Steel-long-products-deal.html

“Indocount peaks at 1000”

We missed this one in the portfolio, though it’s been a top ranked outlier in Capital Mind Snap!

Further Reading:http://www.business-standard.com/article/markets/indo-count-the-next-symphony-115080300024_1.html

“NDL down by 12%”

EPS went from 2.52 to 3.4 — a 35% increase and the stock tanked over 12%. It’s still a 40% higher than when we got in, and such moves are scary, but hey we didn’t complain when the stock went up 10% a day for two days in succession. 

Supplemental Reading:http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/D37CC158_AECA_45D7_8A37_C5D84B038AE2_133332.pdf

“Blood high rates for Food at PVR”

Which makes it a good investment!

Further Reading: http://www.quora.com/Why-are-the-snacks-so-overpriced-at-the-movie-theatres/answer/Robert-Frost-1?srid=hPSf&share=1

“International Paper, if able to sustain the horizontal resistance, has a target of 500+”

By MA:

IAPPM

 

Margins for Straddles

We spoke of how much it would cost to write a straddle (Call and Put at the same strike) – for a single BankNifty contract, it would add up to Rs. 80K, but about 25K of that is simply the premium you receive.

And here’s a graph by AP that makes it look really good to be a writer of Option Straddles:

Straddles

 

Housing Loan growth versus Overall Credit Growth

Housing Loans have, in recent times, grown faster than overall credit growth. 

Housing Loans

 

Equal Weight Index of Top 10 Nifty Stocks by Weightage (54%)

By Vashistha:

Equal Weighted

 

Quick Result and Stock Notes:

  • IDFC Profit dips 46% 
  • Alembic Revenues up 19%. PAT up 8%
  • PFS divests holding in Ind-Barath Energy for Rs 312 cr Ind-Barath is setting up a 700 MW coal-based thermal power project in Odisha and PFS had invested a sum of Rs 105 cr in the same 
  • Royal Enfield registers 49% YoY growth. Sells more than 40,000 Enfields in a month for first time. Exports up 72%
  • Force Motors will start manufacturing engines from BMW at a Plant in Chennai – Stock is trading at 30pe trailing
  • Bharat Forge up 34% on PAT and EPS” – Crosses 1200!

We hope you liked this summary. We’ll post it every few days as we collect more interesting information!

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Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion. 

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.

 

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