- Wealth PMS (50L+)
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:
To prevent hoarding of pulses and check price rise, the Centre today imposed stock limits on pulses held by licenced food processors, importers, exporters as well as large departmental retailers such as Big Bazaar.
It has also directed state governments to intensify anti-hoarding operations and keep a check on black-marketing and profiteering by traders. (Link)
Last week, Volkswagen of America C.E.O. Michael Horn told a House subcommittee investigating his company’s ongoing emissions scandal that it wasn’t a corporate decision to cheat emissions tests by installing “defeat” software in eleven million diesel cars. Instead, Horn said, it was “a couple of software engineers.” His interlocutor, Joe Barton, a Texas Republican, reminded Horn that he was under oath and then asked him when Volkswagen’s senior management in Europe learned of the tampering, which reportedly began in 2009. (Link)
Zomato has confirmed that they are laying off 300 employees, or roughly 10% of their workforce, in order to concentrate more on profit-making niches. Severely hit would be their content teams, which are responsible for live data collection, part of their ‘feet on the street’ business model.
Zomato founder Deepinder Goyal has sent out a memo to all 3000 employees, announcing the need of this layoff, and their future plans to make the company more formidable.(Link)
New Delhi-based auto component maker Amtek Auto is close to reaching a solution with JPMorgan, which holds its non-convertible debentures worth Rs 200 crore.
“We are talking to JPMorgan. We are together working to reach a solution. Within the next two weeks, we hope the matter will be resolved. There will be a solution to the satisfaction of JPMorgan and there will be no default,” Arvind Dham, chairman, Amtek Auto, told Business Standard. (Link 1 & Link 2)
In the quarter ended September 30, 2015 retail investors increased their holdings in stocks that fell the most, while FIIs bought shares of companies that have been among market’s top performers, according to an ET study of the shareholding of companies after the second quarter. FIIs cut their stakes in banks, IT, finance, oil & gas and real estate companies in July-September while increasing their holdings in pharma, capital goods, textiles and construction stocks. (Link)
Over the next five years, mutual funds will probably bring in around Rs 3,50,000 crore. Add this to around Rs 2,50,000 crore that can come from LIC, Rs 1,00,000 crore of private insurance and Rs 2,00,000 crore of PF trusts. So, you have Rs 9,00,000 crore of domestic demand, excluding direct retail investment in the market. Where will the supply come from? Even if the government does divestment of Rs 50,000 crore a year, the supply is only Rs 2,50,000 in five years. (Link)
With the availability of many cheaper sources of funds, LIC Housing Finance, which has reduced its reliance on banks for loans, sees a further decline in its bank borrowing to 11-12 per cent in the next few months from 15 per cent now. “Our borrowings from banks have come down to 15-16 per cent in the second quarter as against a high of 30 per cent earlier. We see a further reduction of 3-4 per cent in this going ahead,” LIC Housing Finance managing director and CEO Sunita Sharma told PTI. (Link)
China’s once world-beating economy sputtered further in the third quarter, decelerating to its slowest pace since the global financial crisis, adding to concerns about the world economic outlook.
The 6.9% growth rate for the third quarter, announced Monday, clouds China’s prospects for reaching the official targeted growth rate of about 7% for the year. It also renews pressure on Beijing to enact more pro-growth measures. (Link)
India’s Prime Minister Narendra Modi has returned from a highly successful trip to Silicon Valley, where he met with the CEOs of top tech companies. For a man who was at one time denied a visa to the U.S. because of his alleged role in the Gujarat riots, he likely had no complaints about his reception. His critics were also muted.
So where’s the beef? Modi has returned to the hurly-burly of Indian politics where the beef catchphrase – an advertising slogan for Wendy’s fast-food franchise in the U.S. and Canada — has acquired a dangerous life of its own. (Link)
This morning, strategists at HSBC inform us that EM buying is back. This coincides with the latest commentary surrounding the Fed’s now-stymied efforts to “normalize” rates. HSBC says EM fund buying came back in a big way last week, but that most of it was in ETFs. Traditional EM mutual funds continued to lose AUM. So perhaps it’s a trade. (Link)
Saudi Arabia is delaying payments to government contractors as the slump in oil prices pushes the country into a deficit for the first time since 2009, according to three people with knowledge of the matter.
Companies working on infrastructure projects have been waiting six months or more for payments as the governmen
t seeks to preserve cash, the people said, asking not to be identified as the information is private. Delays have increased this year and the government has also been seeking to cut prices on contracts, the people said. (Link)
Taxi-hailing app Uber, which holds India as its largest market outside the US, said it will focus on winning the Indian market by leveraging technology to cut costs instead of falling back on discounts and subsidies.
“This is not a game of renting market share,” said Asia head Eric Alexander (Link)
History may eventually decide the ‘New World Order’ started on September 28, when Russian President Vladimir Putin and US President Barack Obama had a 90-minute face off at the UN in New York.
Putin did press Obama for the US to join Russia in a real grand coalition bent on smashing ISIS/ISIL/Daesh. The Obama administration, once again, relented. I detailed here what happened next: an earth-shattering game-changer in the ‘New Great Game’ in Eurasia, straight out of the Caspian Sea, that caught the acronym fest of US intelligence – not to mention the Pentagon – completely off-guard. (Link)
Employment in 8 sectors including IT/BPO, automobiles, gems & jewellery and textile rose by 5.21 lakh last fiscal, said a government report.
However, job creation in these 8 sectors which also include handloom/power loom, leather, transport and metal remained little stressed in the January-March quarter at 64,000 over the previous quarter, as per Labour Bureau’s ’25th Quarterly Report on Changes in Employment’. (Link)
The PF officials recovered Rs 2.37 crore from Rosy Blue and Rs 2.67 crore from Force Motors – for not depositing of the PF dues.(Link)
The Turtle traders were a legendary group of traders coached by two successful traders, Richard Dennis and William Eckhardt. They selected 10 people (turtles) with little to no prior trading experience and turned them into winning traders by providing them with a set of very precise trading rules.
The building block of the turtle traders’ success was their advanced risk and money management and their position sizing approach. The following 5 principles explain the most important risk and management principles of the turtle traders’ strategy. (Link)
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.