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On Slack: JP Morgan Fund, Revenue Sharing regime, IT to Sports – HCL, Wipro & TCS, PM riding the bull, Gross Deflator Problem and more…


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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!)

Awesome discussions again!

A brief summary of some of the interesting things discussed there in the last few days:

#general: JPMorgan Mutual Fund gave 3 big companies exit route:

The fund house restricted redemption in these two schemes to just 1% of its total outstanding units, but had given selective exits to three large corporate investor. SEBI is also looking into its processes to see what went wrong with two of the fund house’s schemes – JPMorgan India Treasury Fund and JPMorgan India Short Term Income Fund

#general: Production-sharing model to revenue-sharing regime – Government wakes up to a better strategy

In the revenue-sharing model, a bidder offering the highest share of revenue or output to the government and maximum work commitment wins the field which wasn’t offered in the older model.

#general: HCL & Wipro go to war with Manchester United and Chelsea, while TCS steers ahead in Formula1

HCL will create a state-of-the-art United Xperience Lab, work together to explore and unveil a number of digital initiatives to transform the experience of the football club’s 659 million global followers; while Wipro will help Chelsea improve the quality of fan experience in the stadium, communicate with fans through digital channels and sell merchandise on its website.

#general: Zerodha to enter non-banking finance space and expand overseas

After tasting success with its discount broking across equity, equity derivatives, currency and commodities, Bengaluru-based broking startup Zerodha is poised to enter non-banking finance space as a next logical extension of its business.

#macronomics: US jobs data gives market the cheers

• Jobless rate managed to make a notable improvement from 5.3% to 5.1%

• The labor force participation rate remained unchanged at 62.6% for the third month in a row, suggesting that working-age Americans are more or less keeping up their job hunt instead of giving up

• Stronger than expected 0.3% rise in average hourly earnings, beating expectations of a mere 0.2% uptick

#macronomics: Time for change in tax rates? Government panel deliberates:

• Abolition of STT on equity derivatives

• Remove regulatory restrictions on domestic FIs participation in equity derivatives

• Consider a time-bound plan for the internationalisation of the rupee

#stocks: Pharma and IT out, Realty Stocks in:

Ramesh Damani pointed out that well-known and trusted stocks from the Pharma and Info-Tech space are unlikely to give mega bucks owing to their exalted valuations

#stocks: Interesting Microcap Portfolios

Discussed on slack were multiple microcaps, including:

Sunil healthcare: 50 cr. market cap manufactures capsules. One expectation was a big jump in profits to Rs. 15 cr. Second largest capsule manufacturer in the country, sells under brand Sunloc, exports too. Makes “veg” pieces.

Spisys: Red flags are “andhra company” and looks operator controlled.  Does tea extracts, has gone through debt restructuring.

Narmada Gelatin: ref Moneylife article:

#general: The Wall Street Cracker

Jim Simons was a mathematician and cryptographer who realized: the complex math he used to break codes could help explain patterns in the world of finance. Billions later, he’s working to support the next generation of math teachers and scholars

#macronomics: PM rides the bulls, reigns the bears back

Prime Minister Narendra Modi’s over 2 hours meeting with Indian honchos moves the market towards the green

#macronomics: Gross Deflator Problem

Confusion endures on India’s growth performance last quarter. Did growth accelerate or decelerate? The GDP is the sum of gross value added (GVA; at basic prices) and net indirect taxes (NIT). The GDP can be thought of as the whole pie, whereas GVA is the slice appropriated by labour and capital, and NIT is the slice appropriated by the government

#stocks: Amara Raja drops 5% as GS removes stock from Asia Pacific buy list

The investment bank has cut its rating on the stock to ‘neutral’ from ‘buy’ following the recent rally on the counter, but remains positive on the company, fundamentally. The investment bank expects Amara Raja to post a topline CAGR growth of 32 per cent over FY15-18, driven by gains in market share from Exide in the OEM and replacement markets due to its superior product quality and around 8 per cent lower price.



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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.

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