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On Slack: Standard Chartered loss, Gold Narrates the Real Story and more….

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:

Slack Logo2

#general: Standard Chartered reports $981 million loss from Indian operations

Loan impairments, including restructured loans, across Standard Chartered’s India portfolio surged to $1.3 billion in 2015 from $171 million in 2014. (Link)

#general: Promoters such as Sunil Mittal, Kansai Paints and others go fishing as stocks sink to new lows

Plunging stocks have at least made one set of investors happy. Promoters such as Sunil Bharti Mittal of Bharti Airtel and Kansai Paints of Japan have lapped up shares of their companies taking advantage of valuations at multi-year lows. (Link)

#forex: Tell me when the dollar rally ends, I’ll tell you when EM starts working again

(Link)

#macronomics: Gold Narrates the Real Story: World Is Going Downhill despite Flood of Money

(Link)

#macronomics: The Trickle of U.S. Oil Exports Is Already Shifting Global Power

(Link)

#general: Make in India push: Invest $2 billion, get residency permits and special rates for utilities

If a foreign company invests $2 billion, it will get residency permits allowing long stay in India for its key executives as well as cheap rates for utilities and a special package on upscale housing. That’s the latest policy idea of the Modi government, which is pushing hard to make India a more attractive foreign investment destination.

Senior officials, who spoke on the condition they not be identified, told ET the proposal could be formally unveiled after the Budget session of Parliament gets over in mid-March. (Link)

#general: What is Gold Chart trying to tell us?

(Link)

#general: Sugar prices soar 9% in market ‘blitzkrieg’

Sugar prices soared nearly 9% in a market “blitzkrieg”, fuelled by an International Sugar Organization upgrade to its estimate for the world production deficit, and rumours over European availability too.

Raw sugar futures for March touched 13.72 cents a pound in New York at one point, crossing back over their 100-day moving average, before easing back to 13.50 cents a pound, a gain of 7.1% on the day. (Link)

#macronomics: Invoking Hitler, Raghuram Rajan warns: A strong government may not move in the right direction

Hitler provided Germany with extremely effective administration – the trains ran on time, as did the trains during our own Emergency in 1975-77′. (Link)

#general: Expect sugar to trade sideways to higher: Angel Commodities

According to Angel Commodities, sugar is expected to trade sideways to higher on need based buying from traders and stockists as stock levels are higher in the country. (Link)

#general: Druck backs up the Truck and Loads up on Gold

(Link)

#general: Now, government cyber cell to counter ‘negative’ news

Every time a negative narrative surfaces, a possible counter would be initiated — through press releases, briefings or press conferences, depending on the intensity or standing of the post,” said sources. (Link)

#macronomics: Sword of recapitalisation

Bailing out public-sector banks from the NPA crisis will either increase the fiscal deficit or lead to cuts in welfare and capital expenditures. (Link)

#macronomics: Column: Why are states borrowing so much?

Depletion of cash surpluses might have limited the ability to draw from central government grants. (Link)

#stocks: Ajay Piramal’s entry into the VC industry: will it succeed?

There is just too much money chasing too few quality start-ups in India and, whilst Piramal’s entry into the VC industry is good news for entrepreneurs, it is not necessarily the best for the investor in VC funds. (Link)

#general: The eventual consequences of risk seeking or risk blind behaviour

(Link)

#general: Airline biggies threaten legal action against ministry

Indigo, Jet, Spice Jet and Go Air demand level playing field in aviation policy, say government can’t favour only two new airlines. (Link)

#general: Why critics are worried about the new FDA boss

The Food and Drug Administration, which regulates about a quarter of every dollar Americans spend, has a new boss — and he’s already under fire for being too cozy with the pharmaceutical industry.

Dr. Robert M. Califf, a cardiologist and researcher, was nominated by President Obama in September to become the new commissioner of the agency. His confirmation by the Senate was delayed by lawmakers, many of them Democrats, who worried that his links with the pharmaceutical industry would bias his ability to regulate that business and who voiced disapproval over the FDA’s handling of the opioid abuse crisis in America. (Link)

#general: NPCI’s Unified Payment Interface Has the Potential to Kill Mobile Wallets in India; All Set To Launch In April

National Payments Corporation of India (NPCI), the organization which the hub of all on
line payment systems operating in the country is all set launch the highly anticipated ‘Unified Payment Interface’ (UPI) from April, 2016. (Link)

#general: Good news! Now, no service charge, surcharge and convenience fee on digital payments

No surcharge, service charge and convenience fee will be levied on card and digital payment.

The Union Cabinet chaired by the Prime Minister Narendra Modi on Wednesday gave its approval for introduction of steps for promotion of payments through cards and digital means.(Link)

#stocks: A model portfolio to survive 2016

Given the turbulence in 2015, the predictions are ominous for the markets this year too. Keeping that in mind, Forbes India has put together a portfolio of companies that can help tide over bad times. (Link)

#general: Infosys CEO Vishal Sikka’s tenure extended by two years

Sikka’s total compensation now stands at $11 million a year, up from $7.08 million earlier.(Link)

#general: Why is Arun Jaitley meeting economists and journalists on Saturday?

The move is unusual, not only because it has never been done before, but also because of the message it sends out. (Link)

#macronomics: China Warns U.S. After Trump Wins Nevada Caucus

China warned the United States on Wednesday not to adopt punitive currency policies that could disrupt U.S.-China relations after Donald Trump’s win in the Nevada caucus.

Foreign Ministry spokeswoman Hua Chunying told reporters in Beijing that “we are following with interest the U.S. presidential election.” (Link)

#macronomics: Foreign Holdings of India Bonds Drop as Rupee Flirts with Record

Foreign holdings of rupee-denominated debt are falling at the fastest pace since December as losses in Indian bonds deepen and the currency hovers near a record low.

The nation’s sovereign notes have turned into Asia’s worst performers in 2016, from the best in the previous two years, amid concern Prime Minister Narendra Modi’s Feb. 29 budget will show fiscal discipline is slipping away. (Link)

#general: Modi Finger-Prints Seen In Prabhu’s Rail Budget 2016; Here Are 8 Key Takeaways

The rail budget presented today (25 February) has all the finger-prints of Narendra Modi himself, with the sheer number of alliterative initiatives being a dead giveaway. Prabhu, for example, talked of Nav Arjan, Nav Manak and Nav Rachna – meaning new revenues, new norms, and new structures. Modi surely must have had a hand in this formulation, with supportive evidence coming from his sanguine expression throughout the speech. (Link)

#general: Pimco Adviser Sees ‘The Trade of a Decade’ in Emerging Markets

Emerging-market assets are so cheap that they may be “the trade of a decade,” according to Research Affiliates LLC, a sub-adviser to Pacific Investment Management Co., one of the world’s biggest money managers.

They’re joining a growing number of investors, including BlackRock Inc., Franklin Templeton and Goldman Sachs Asset Management, who are turning bullish on emerging markets after three years of underperformance. With borrowing costs at the highest levels since the depths of the global financial crisis, traders are being compensated for challenges ranging from falling commodity prices to China’s economic slowdown, BlackRock said Tuesday. (Link)

#general: Will Oil Rebound (Or Is It Actually Different This Time)

(Link)

#general: RBI asks banks to increase provisions in debt-for-equity swaps

The Reserve Bank of India (RBI) on Thursday asked lenders to spread out in equal instalments provisions they make when they take over troubled loan accounts under a special restructuring programme to deal with stressed assets.

The RBI asked banks to build up over four quarters provisions amounting to at least 15 percent of the loan for so-called strategic debt restructuring (SDR). In that programme, banks will swap part of the loan for majority ownership of a troubled company and then look for a new owner.(Link)

#stocks: Unitech defaults on Rs38.52 crore payments to Central Bank of India

Unitech says that it has repaid Rs.264 crore out of the Rs.300 crore loan and the remaining would be paid shortly. (Link)

#general: Citi: Here Comes a Global Recession

After a few years of reasonably calm markets and stable growth around the world, Citigroup Inc. says the chances of a global recession are already high and only going up.

“In our view, global growth is at a highly precarious point, after 2-3 years of relative calm,” the team of economists led by Willem Buiter said in their note, which is likely to exacerbate concerns about the world’s ability to withstand a pause in China’s stunning economic growth.(Link)

#general: Diageo, Mallya smoke the peace pipe

Mallya absolved of Rs 7,200 cr irregularities; signs five-year non-compete pact with Diageo; creditors now have reduced options for loan recovery. (Link)

#general: Ackman’s fund off 17.3% for year, erases banner gains from 2014

Billionaire investor William Ackman has managed to erase his entire 40 percent return of 2014, a performance that put him at the pinnacle of the hedge fund world.

Ackman’s Pershing Square Holdings portfolio has lost 17.3 percent so far in 2016, the fund told investors on Wednesday. Added to last year, when it lost 20.5 percent in a relatively flat year for markets, the fund’s declines are now greater than its 2014 gain. (Link)

#general: Over long term, large caps look as ordinary as FDs

The returns offered by these equity schemes is in line with what bank FDs made for investors.(Link)

#general: Gover
nment may auction stake in ITC and L&T to achieve divestment target

The government is planning to auction holdings in cigarette maker ITCBSE -0.07 % and engineering firm Larsen & Toubro (L&T) to make up part of the shortfall in the money it targeted to raise from disinvestment and alleviate the stress on finances.

The sale is expected to raise about Rs 35,000 crore, said two people aware of the plan. (Link)

#general: ‘Liquid Freedom’ Sails From Texas, Tilting Power in Global Oil

(Link)

#general: Expert Views – India sees growth holding up, inflation falling

India’s economy will grow by between 7.0 percent and 7.75 percent in the 2016/17 fiscal year that starts on April 1, the Economic Survey said on Friday, ahead of the presentation of the annual budget by Finance Minister Arun Jaitley on Monday.

India should also review its medium-term fiscal strategy, the government report recommended, an indication of the challenge faces to raise pay for government employees and bail out banks without increasing borrowing. (Link)

#backtobasics:

How can I add IV Rank & IV Percentile to my think or swim charts? – Link

Liquid BeesLink

Yes Minister – Link

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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.