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General

On Slack: MSCI indexes, Equalisation levy, Plumber Trading Tips, IIP and Industrial data, Big Uber Investment, Fed’s Beige Book, Pound Tumbles, Golden Cross, Market Profile and much 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.

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

#fx-commodities: China Futures Exchange Says Client’s Hedging Caused Flash Crash

An investor who used Chinese stock-index futures for hedging triggered a flash crash Tuesday, the China Financial Futures Exchange said.

Contracts on the CSI 300 Index due in June dropped by the 10 percent daily limit at 10:42 a.m. local time before recovering almost all of their losses in the same minute. The sudden drop was triggered by the unidentified trader’s order for 398 contracts at current market prices. They were filled consecutively, which prompted the broader selloff, the futures exchange said in a statement. (Link)

#general: Every Stock Was a Buy to This Analyst Team, Then Shares Tanked

The unit of Emperor Capital Group Ltd. issued buy recommendations on every one of the 173 companies it reported covering from April 2015 through May 16. Its target prices, which the company says forecast trading levels within weeks, predicted gains of 25 percent on average. They are frequently the most bullish among analysts who cover the same stocks and list their calls with Bloomberg, including those based on the standard 12-month horizon. (Link)

#general: Goldman Sachs raises odds of China share inclusion in MSCI indexes to 70%

Goldman Sachs has increased the probability that MSCI will include mainland Chinese shares in its indexes to 70 percent, citing recent steps taken by Beijing to remove obstacles for global money managers to invest in the country’s equity markets. (Link)

#general: Barclays Director Arrested for Giving Plumber Trading Tips in Exchange for Home Renovations

(Link)

#general: Equalisation levy of 6% to come in force from June 1

Equalisation levy of 6 per cent on services pertaining to cross border digital transactions will come into effect from June 1.

At present, equalisation levy is leviable only on payments relating to online advertisements, said C A Gupta, Partner, Deloitte Haskins and Sells. (Link)

#general: Insight – RBI chief Rajan wins over Modi despite broad mistrust

In late 2014, the knives were out for RBI governor Raghuram Rajan. Finance ministry officials were frustrated by his reluctance to cut interest rates to stimulate growth, and moves were afoot to ease him out of the job. Some were airing their reservations about Rajan’s hawkish stance in the media.

Prime Minister Narendra Modi convened a meeting of senior finance ministry staff that December to hear their complaints, said a person who was present. (Link)

#fx-commodities: Sugar: World Markets and Trade

(Link)

#macronomics: Discrepancies’ drive GDP growth

What would the growth rate be if the ‘discrepancies’ are left out of the GDP data? A mere 3.9, at constant prices. (Link)

#macronomics: India’s Rupee Falls on Report Rajan Doesn’t Want a Second Term

India’s rupee reversed gains and bonds declined after a local-language newspaper reported that central bank Governor Raghuram Rajan doesn’t want an extension of his term, though Prime Minister Narendra Modi wants him to stay on. (Link)

#stocks: S&P lowers Rolta India rating yet again for missing interest payment

In a new downgrade, S&P has lowered its long-term corporate credit rating on Rolta India to selective default from ‘CCC-’. (Link)

#mutualfunds: You can redeem only Rs 2 lakh from MF scheme if your fund house faces systemic crisis

Investors will be able to redeem only up to Rs 2 lakh from a mutual fund scheme if the fund house faces systemic crisis, and the market regulator on Tuesday said that fund houses can impose restrictions on redemptions only if there is a systemic crisis or an event that severely constricts market liquidity. (Link)

#general: PM Modi to give RBI Governor Raghuram Rajan a second term?

With Modi’s patronage, it is more likely the government will reappoint Rajan, whose three-year term expires in September, should he wish to stay on, the sources said. (Link)

#general: No rate cut in June, but Rajan may give a parting gift in August

After disappointments on the inflation front and a delay in the arrival of monsoon, policymakers expect the Reserve Bank of India (RBI) to pause on its rate-cut cycle at its June 7 policy review.

Last year, RBI had front-loaded its rate cuts in June to neutralise any monsoon deficit. But do not expect such a surprise this time around. (Link)

#politics: The Importance of Being Subramanian Swamy

(Link)

#macronomics: Growing divergence between IIP and industrial data in GDP

Barring Apr, May & Nov, IIP expansion remained below 3% in every other month. (Link)

#general: India’s millennials to be catalyst for consumption

Goldman Sachs report identifies eight consumer segments or cohorts based on income and percentage of population. (Link)

@SJosephBurns

Someone is building the Internet’s biggest list of stock market clichés (Link)

Master List of Stocks

#general: Like Flipkart, other IT companies too delay offer letters

(Link)

#general-from the past: Two months that changed India

From the brink of defaulting on international payments to a Budget that changed the face of India – A K Bhattacharya takes us through the twists and turns. (Link)

#bonds: SBI Mutual Fund launches first-ever fixed income exchange traded fund SBI-ETF 10 Year Gilt

The scheme would invest up to a minimum of 95 per cent in securities covered by the Nifty 10 year benchmark GSec Index, which have a medium to high risk profile, the fund house said in a report. (Link)

#macronomics: With Its Big Uber Investment, Saudi Arabia Seeks to Tackle Multiple Political Problems

(Link)

#general: India buyers’ club: The new way for Americans to buy cheap drugs

A growing number of sick Americans are traveling thousands of miles to India. Why? For huge discounts on prescription drugs. (Link)

#general: The Patanjali story

Baba Ramdev is parlaying his popularity as a yoga guru to build a Consumer Products Empire that’s up against global giants like Unilever and Colgate. (Link)

#macronomics: Fed’s Beige Book: ‘Tight Labor Markets’ Are Pushing Up Wages

The Fed also reports modest or moderate economic growth in the majority of its 12 districts.(Link)

#macronomics-from the past: SAP Raises 2017 Forecasts as Cloud Business Growth Quickens

SAP SE showed progress in remaking itself as a supplier of cloud computing software as more customers adopted a revamped version of its main product, prompting it to boost sales and profit forecasts for next year. (Link)

@GoldmanSachs – The Fed-PBoC monetary policy loop

The Fed-PBoC monetary policy loop

#macronomics: If Rajan exits, so will billions in investment

(Link)

#macronomics: India’s population explosion will make or break its economy

India’s demographics are mind-boggling: By 2020, it will have 900 million people of working age, and the average age of its citizens will fall to 29. Two years later, it should pass China to become the world’s most populous country. (Link)

#general: For the first time in history, India will not have power deficit situation in FY17

India has, for the first time in history, declared that it will not have a power deficit this year, a situation officials say is an outcome of the current government’s initiatives to resolve burning issues like fuel scarcity. The country will have a surplus of 3.1% during peak hours and 1.1% during non-peak hours during 2016-17, latest data from the Central Electricity Authority shows. (Link)

#stocks: Tata Steel close to deal to keep UK business: Reports

Tata Steel is believed to be close to striking a deal with the UK government to keep its British steelworks rather than sell it off, which would secure the future of 11,000 workers, UK media reports said today. (Link) 

#general: How China Fell Off the Miracle Path

(Link)

#macronomics: India May Have Won the Battle with Food Inflation before the First Drop of Monsoon Rain

Instead of looking to the skies, central bankers and other inflation fighters should be looking to New Delhi. (Link)

#general: Follow the sun – Solar power is reshaping energy production in the developing world

(Link)

#forex-commodities: Pound Tumbles, Volatility Jumps after Polls Show Brexit Momentum

(Link)

#general: Cabinet Secretary replaces Raghuram Rajan in key RBI panel

In a departure from past practice, the government has asked the Cabinet Secretary to head the committee for the interview of a new deputy governor of the Reserve Bank on Monday to find a replacement for H R Khan. (Link)

#backtobasics:

Budget 1991-92 – Speech of Shri Manmohan Singh, Minister of Finance 24th July, 1991 – Link

Does Golden Cross Work – Link Link Link 

How to Read a Market Profile Chart? – Link

Identifying Bad Trading HabitsLink

Market Profile – Basic Concept N Terminology – Link Link

Random Musings on Market Profile – Link

The Insider by P. V. Narasimha Rao – Link

The mystery of Samir Arora – Link

Who makes Money Consistently in Day Trad
ing?
Link

Your Portfolio Design: Assume the Fetal PositionLink Link

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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.