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General

On Slack: Insider Trading by SEBI, Patanjali biggest FMCG advertiser and more….

The Slack Discussions

The Slack group at Capital Mind Premium has been extremely active and if you haven’t been there (Premium subscribers only), pop us a note by replying to this email.

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

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#general: Cancer drugs to cost more on high duty

Life-saving imported drugs to treat cancer, HIV and cardiac failures will now be costlier

In a notification dated February 2, the government has withdrawn the exemption on customs duty on certain bulk drugs. This will increase the duty by 5% to 35%. (Link)

#general-from the past: Porinju Veliyath’s & Ashish Chugh’s Fav Micro-Cap Stock’s Top Brass Held Guilty of Insider Trading by SEBI

(Link)

#general: Most Germans don’t buy their homes, they rent. Here’s why

(Link)

#general: Baba Ramdev’s Patanjali Ayurved Ltd becomes India’s biggest FMCG advertiser this week; outnumbers Cadbury, Parle

Meet India’s biggest FMCG advertiser — at least for now — the Baba Ramdev-led Patanjali Ayurved Ltd. For the seven days to January 29, TV commercials (TVCs) of products under the Patanjali brand outnumbered those from big consumer goods brands such as Cadbury, Parle and Pond’s. (Link)

#general: Bigbasket Revenue at Rs.178 Crores in FY 14-15; Losses at Rs. 61 Crores

Hyperlocal grocery delivery startup BigBasket saw a 2.5 times growth in its revenue in FY 14-15 as its revenue figures reached INR 178 crores.

BigBasket, which is owned and operated by Supermarket Grocery Supplies Private Limited, was founded by Hari Menon, V.S. Sudhakar, Vipul Parekh and Abhinay Choudhari in October 2011. It is an online grocery store that operates through the website and mobile app and provides home delivery in on-time and flexible delivery time slots. (Link) 

#general: Modi And Jaitley May Be Setting Themselves up for another Budget Flop

If the reports now leaking out of North Block are anywhere near true, we are going to get even more initiatives from the centre in the 29 February budget. Both the Modi government and the finance ministry are setting themselves up for failure through an initiative overload. (Link)

#general: Morgan Housel: What Makes Us Bad Investors?

(Link)

#general: Discussions with government on monetary policy panel over: Raghuram Rajan

Government has to decide on the timing of tabling the amendments to the RBI Act before Parliament, says Rajan (Link)

#macronomics: The Number Everyone’s Been Waiting For: Chinese Reserves Plunge By $100BN – What Does It Mean for Markets?

As we previewed on Thursday, the biggest event of the week, and perhaps of the month, was not Friday’s nonfarm payroll report, but the January update of China’s FX reserves, which the PBOC released last night. The number came out at $3.2309 trillion, down $99.5 billion from the prior month, and $8 billion less than the December outflow of $107.6 billion. (Link)

#general: Lending to emerging markets comes to a halt

(Link)

#general: Fluffy Indian cotton balls prove tougher than Tata Steel

While Indian steel continues to get whacked for being uncompetitive amid a China-led glut, the nation’s textile sector, which also competes with China, is spinning investors a tidy fortune.(Link)

#general: India tops global confidence index in Q4: Nielsen

For the fourth quarter in a row, India has topped global consumer confidence index as measured by research agency Nielsen in 2015. But the catch is that it continues to show signs of a recessionary sentiment for the third straight quarter.

Nielsen’s just released report shows India’s consumer confidence index for the fourth quarter of 2015 was 131, ahead of the Philippines (117), Indonesia (115) and Thailand (114). But 50% of people polled feel India is still in economic recession, implying recessionary sentiment is strong. (Link)

#general: SEBI cites ‘mutual friends on Facebook’ as insider trading evidence

While SEBI has been examining Twitter and Facebook for quite some time for investigation purposes, this is the first time it has used Facebook account as evidence. (Link)

#general: Rise in profit for Dubai’s Emaar Malls less than expected

Profit for the quarter ended December at Emaar Malls Group, which owns Dubai’s largest shopping centre, The Dubai Mall, stood at Dh435 million, up 5.5 per cent compared with a year earlier.

Although the profit was up, it was still lower than analysts’ forecasts, missing Bloomberg’s consensus of Dh455m. (Link)

#general: Rs 1.14 lakh crore of bad debts: The great government bank write-off

That is the amount of bad loans waived in last three financial years, more than the write-off in the previous nine.  (Link)

#general: Rocket Internet: What it’s Like to Work at a Start-up Clone Factory

We secretly interviewed an employee of Rocket Internet, Europe’s most notorious incubator that makes billions of dollars from ruthlessly copying Silicon Valley startups. (Link)

#macronomics: Is It Time To Panic About Deutsche Bank?

(Link)

#general: India said to tap $12 Billion of State Firms’ Cash with Buyback

India’s government has asked state-run companies to buy back shares, people with knowledge of the matter said, as Prime Minister Narendra Modi looks to narrow Asia’s widest budget deficit without cutting stimulus spending.

The boards of Coal India Ltd., MOIL Ltd., NMDC Ltd., National Aluminium Co. Ltd., India Renewable Energy Development Agency Ltd. are among those that will have to decide on valuations, the people said, asking not to be identified as the talks are private. These companies had about 784.5 billion rupees ($11.6 billion) in cash and marketable securities last year, according to data compiled by Bloomberg, more than double Modi’s social welfare budget. (Link)

#macronomics: GDP data to show economy racing, realities less rosy

The median estimate from a Reuter’s poll of economists put GDP annual growth at 7.3 percent in the quarter through December, just below 7.4 percent in July-September. (Link)

#macronomics: World’s Largest Energy Trader Sees a Decade of Low Oil Prices

Oil prices will stay low for as long as 10 years as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to the world’s largest independent oil-trading house.

“It’s hard to see a dramatic price increase,” Vitol Group BV Chief Executive Officer Ian Taylor told Bloomberg in an interview, saying prices were likely to bounce around a band with a midpoint of $50 a barrel for the next decade. (Link)

#macronomics: Futures, Global Stocks Tumble As Europe Bank, Periphery Carnage Unfolds

(Link)

#macronomics: Nickel trades at 12-year low as similar-style busts hit virtually every commodity

(Link)

#macronomics: Guggenheim’s $240 Billion Man Says Nasdaq to Tumble Below 3,800

Technology stocks will tumble further this year as investors flee to safety and buyers stay on the sidelines, according to Scott Minerd, chief investment officer for Guggenheim Partners LLC. (Link)

#stocks: Chesapeake says not planning bankruptcy as shares halted down 50.7%

(Link)

#general: AchheDin For Guj CM Anandi Ben’s Son. His Co. Shares Zoom 850% In 18 Months

(Link)

#general: Narendra Modi’s star fades in India as promised reforms fail to materialize

(Link)

#general: Amazon India ends return policy for mobile phones

Amazon India has notified buyers that they won’t be able to return mobile phones bought from the online retailer. The new policy is only applicable to mobile phones that are fulfilled by Amazon. Buyers will be eligible for getting the device replaced only if the product is defective or was damaged during transit, and not by citing the No longer needed option. The replacement is available for a duration of 10-days from delivery of the product. (Link)

#general: Why Southwest Airlines Fell despite Strong January Traffic

The healthy traffic data however failed to find favor with the investors as the stock declined 4.95% on Feb 5 to close the trading session at $35.69. We believe that the decline was in line with the overall disappointment surrounding the market due to the tech sell-off and the U.S. employment data that was released on Feb 5. (Link)

#general: How Bottom-Up Stock Pickers Endure Bear Markets

(Link)

#general-from the past: Wash out quarter or worst behind? How to trade PNB now

Terming it a ‘wash-out’ quarter, CLSA retains outperform rating given reasonable valuations and an expected recovery in earnings profile but lowered earnings by 30 percent. (Link)

#recommended-readings:

The Definitive Guide to Point and Figure: A Comprehensive Guide to the Theory and Practical Use of the Point and Figure Charting MethodLink

Truth of the Stock Tape: A Study of the Stock and Commodity Markets with Charts and Rules for Successful Trading and Investing – Link

The Richard D. Wyckoff Method of Trading and Investing in StocksLink

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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.