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On Slack: Real Estate & Fuel Prices Discount, GDP buzz, Rate Cuts (Deposits & Loans), Systematically Important Banks 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:

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Capital Mind moves from being a baby boomer to a year old kid! Deepak Shenoy leads the charge.

1 year anniversary

Here is what our premium subscribers had to say:

@ Anupam Gupta – Happy 1st Anniversary Deepak, here’s looking at you crossing HDFC MF’s AUMs sooner than it took HDFC to reach there.

@Abishek – Congrats deepak. Cap Mind membership has been my best investment so far. All the best for the future and may your tribe grow

@Kishore Shanbhag – Congrats @deepakshenoy  & Capital Mind team. It is just start of many more great years to follow. I want to take this opportunity to tell you that I learnt & benefitted a lot through your mails & messages.

Thanks very much folks!

Is the stock market effect being passed on to real estate?

• Mumbai’s real estate markets witness the first sales discount: http://www.dnaindia.com/india/report-navi-mumbai-flat-sold-for-half-the-asking-price-2119181

• Credit check by the RBI… How do you measure genuine buyers? http://economictimes.indiatimes.com/wealth/real-estate/realty-trends/genuine-buyers-were-unable-to-buy-home-due-to-high-property-prices-says-rbi/articleshow/48698099.cms

• Bangalore has the second highest inventory of unsold housing units:http://www.thehindubusinessline.com/news/real-estate/bengaluru-has-secondhighest-inventory-of-unsold-housing-units/article7602953.ece

Fuel Prices hurting the common man more than Telecom? Nah… Price cut from 1-Sep

• Telecom tower companies turn to renewable energy amid pressure of fixed rentals & costly powerhttp://articles.economictimes.indiatimes.com/2015-08-26/news/65886872_1_telecom-tower-companies-viom-networks-indus-towers

• India Diesel Gensets Market to Cross USD2.1 Billion in 2015, Says TechSci Research –http://www.prnewswire.com/news-releases/india-diesel-gensets-market-to-cross-usd21-billion-in-2015-says-techsci-research-520487532.html

Here is how Petrol burns a hole in the Green City… No wonder everyone wants a Work from Home Policy in place… (Since the price cut on 1-Sep-15 varies state to state, the latest reduction has not been captured here).

Fuel Prices

 

JPM pulls a speed breaker on redemptions:

• JP Morgan becomes greedier… https://www.jpmorganmf.com/inec/en/Addendum/JPMorgan%20India%20Short%20Term%20Income%20Fund%20and%20JPMorgan%20India%20Treasury%20Fund.pdf

http://www.business-standard.com/article/markets/redemption-from-jp-morgan-s-two-india-schemes-becomes-difficult-for-large-institutional-clients-115083000459_1.html

• SEBI warns mutual funds against randomly investing in corporate bonds which could backfire –http://economictimes.indiatimes.com/markets/stocks/policy/sebi-warns-mutual-funds-against-randomly-investing-in-corporate-bonds-which-could-backfire/articleshow/48737084.cms

#general: Loan + Loan Insurance = Expensive Affair. Solution = Complaint to Ombudsman

Here is our opinion: You can buy the insurance separately and pledge to them (buy a term plan for the cost of the house and pledge it to them). If they complain you can take it to the ombudsman.

Moustache

 

Additional Readings:

http://www.business-standard.com/article/pf/home-loan-customers-are-not-bound-to-buy-insurance-policy-113020100122_1.html

http://www.jagoinvestor.com/2012/12/forced-selling-with-home-loan.html

Indian GDP numbers released for the period April – June 2015. What is the buzz all about? Read here:

• GDP at constant (2011-12) prices in Q1 of 2015-16 is estimated at `27.13 lakh crore, as against `25.35 lakh crore in Q1 of 2014-15, showing a growth rate of 7.0 percent

• The economic activities which registered growth of over 7 percent in Q1 of 2015-16 over Q1 of 2014-15 are ‘manufacturing’, ‘trade, hotels and transport & communication and services related to broadcasting’ and ‘financial, insurance, real estate and professional services’.

• Detailed Report: http://mospi.nic.in/Mospi_New/upload/nad_PR_31aug15.pdf

Here is what the markets had to say:

@moneycontrol: http://www.moneycontrol.com/news/economy/excl-india-chief-statistician-explains-q1-gdp-numbers_2839641.html

@livemint: http://www.livemint.com/Politics/pdrXPepfXf9aDTke7nqk6M/GDP-data-today-Is-India-growing-or-slowing.html

Also read: http://www.livemint.com/Money/7cq7UuZHZvGgIMSXLoFibI/What-the-June-quarter-GDP-numbers-tell-us-about-the-economy.html

@ndtvprofit: http://profit.ndtv.com/news/economy/article-gdp-number-disappointing-say-experts-1212817

And Here is what we wrote at Capital Mind about it 

What if the RBI does not cut rates??… We can… Indian Banks cut base rates, loans to be cheaper … But they also cut deposit rates.. 🙁

HDFC Bank today lowered base rate by 0.35 per cent to 9.35 per cent – the lowest in the industry, while Canara Bank cut its minimum lending rate by 0.10 per cent to 9.90 percent

http://www.dnaindia.com/money/report-home-car-loans-to-come-down-as-banks-cut-base-rates-2120649

Dr Devi Shetty taking Narayana Health for IPO soon

http://economictimes.indiatimes.com/markets/ipos/fpos/here-is-why-dr-devi-shetty-taking-narayana-health-for-ipo-soon/articleshow/48751746.cms

RBI mints new term: SIB – Systematically Important Banks in India that are Too Big To Fail (TBTF)

Camera: http://economictimes.indiatimes.com/news/economy/policy/government-to-name-systemically-important-banks-soon-rbi-deputy-governor/articleshow/48670523.cms

Lights: https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=31680

Action: http://economictimes.indiatimes.com/news/economy/finance/rbi-identifies-sbi-and-icici-bank-as-systemically-important-banks-in-india/articleshow/48746298.cms andhttps://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2861

Ratings: What does it mean? Not in Greek or Latin but in Hinglish..

• State Bank of India and ICICI Bank. Their capital requirement rises by 0.6% and 0.2% respectively

• Cost of public sector intervention and consequential increase in moral hazard require that future regulatory policies should aim at reducing the probability of failure of Systemically Important Banks (SIBs) and the impact of the failure of these banks

• The Basel Committee on Banking Supervision (BCBS) required all member countries to have a regulatory framework to deal with Domestic Systemically Important Banks (D-SIBs).

• RBI will determine a cut-off score beyond which banks will be considered as D-SIBs. Based on their systemic importance scores in ascending order, banks will be plotted into four different buckets and will be required to have additional Common Equity Tier 1 capital requirement ranging from 0.20% to 0.80% of risk weighted assets, depending upon the bucket they are plotted into

• Based on the data as on March 31, 2013, it is expected that about 4 to 6 banks may be designated as D-SIBs under various buckets. The computation of systemic importance scores will be carried out at yearly intervals. The names of the banks classified as D-SIBs will be disclosed in the month of August every year starting from 2015.

Some Cheers to the market – India to Exempt Foreign Funds From Minimum Alternative Tax

Foreign institutional investors won’t have to pay a tax on profits earned before April 2015 – Indian Finance Minister Arun Jaitley – http://www.bloomberg.com/news/articles/2015-09-01/india-to-exempt-foreign-funds-from-minimum-alternative-tax

https://www.capitalmind.in/2015/09/jaitley-says-minimum-alternate-tax-on-fiis-wont-apply-even-in-the-past/

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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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