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On Slack: 27/km day, Machine Beats Man, RBI coffers 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 (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: At 27km/day, highway building hits record in June

“We are confident of crossing 800 km this month. Each zone has reported good progress. The exact figures will be known next week. In May, the total construction was 677 km against 468 km in April. (Link)

#general: In Brexit Trading, Machine Beats Man

In post-Brexit vote trading, the winners were computer-model-driven firms that favored high-quality government bonds, gold and safer currencies like the yen, while mostly avoiding riskier bets like oil and emerging markets. (Link)

#stocks-fundamentals: Vedanta logs robust earnings, beats falling commodity prices

In spite of falling commodity prices, Vedanta Ltd, formerly known as Sesa Sterlite, has come out with robust results in a volatile market helped by cost control and higher productivity, the company said today.

“Vedanta has produced robust results in a volatile market with relentless focus on cost discipline and improved productivity, leading to strong earnings and record cash flow,” Chairman Navin Agarwal said while addressing 51st annual general meeting of Vedanta Ltd in Goa. (Link)

#general: Karnataka has too much power

The monsoon is already working its magic in Karnataka. The state that was reeling under a shortage of power until recently now has more than it can use.

Power consumption in the last couple of days has fallen by close to 2,500 MW (mega Watt), forcing the energy department to run its stations at minimum capacity, and put on hold all its short-term purchases. (Link)

#general: He begged on the streets once. Today, this entrepreneur has a turnover of Rs 30 cr and dreams of an IPO

His company today has a turnover of Rs 30 crore and employs 150 people. This by no means is the finishing line even though 50-year-old Renuka Aradhya started life’s race with a major handicap. (Link)

#general: Raghuram Rajan resists plan to fund banks from RBI coffers

The plan, first floated by Arvind Subramanian, involves shrinking the RBI’s balance sheet by as much as 4 trillion rupees, then injecting the cash into state-run banks. (Link)

#general: How Amazon Triggered a Robot Arms Race

In 2012 Jeff Bezos scooped up warehouse automation firm Kiva. Everyone else is still trying to catch up. (Link)

#general: Vodafone Says UK Headquarters in Doubt after Brexit

British telecom giant Vodafone warned on Wednesday that the future of its London-based headquarters is in doubt after voters chose to quit the European Union.

EU membership has been important to Vodafone’s growth, the group said in a statement, with most of its 462 million customers and 108,000 employees based outside of Britain. (Link)

#general: It’ll pour in July; rainfall deficiency down to 12%: Met Dept

Speaking to CNBC-TV18 DS Pai of the indian Meteorological Department said that central Maharashtra has seen a deficiency in rainfall of about 30 percent. (Link)

#macronomics: Economic implications of Brexit

(Link)

#general: Taxman Notifies Foreign Tax Credit Rules, Corporates to Gain

To provide relief to corporates with income abroad, the tax department has notified ‘Foreign Tax Credit’ rules allowing companies to claim credit for taxes, surcharge and cess paid overseas.

The rules, which come into effect from April 1, 2017, allow taxpayers to claim credit of foreign tax under dispute once it is finally settled. (Link)

#general: 3 Reasons a July 2016 Stock Market Crash Could Be Headed Straight for Us

Investors are starting to regain confidence in global markets after the Brexit vote, but they shouldn’t get too comfortable.

That’s because the issues that could cause a July stock market crash have not gone away.(Link)

#general: Deutsche Bank Poses the Greatest Risk to the Global Financial System”: IMF

(Link)

#general: D-Mart parent Avenue Supermarts working on Rs. 1,200 crore IPO

Likely to be launched in the second half of 2017, the initial public offering could value Avenue Supermarts at around Rs.10,000 crore. (Link)

#general: 25 years on, Manmohan Singh has a regret: In crisis, we act. When it’s over, back to status quo

Today, July 1, marks the 25th year of the historic devaluation of the rupee that set in motion the irreversible process of opening the Indian economy. The Indian Express speaks to those who unlocked the power of change to ask what then – and what now. (Link)

#stocks-fundamentals: ICICI starts debt restructuring for Jaypee as cement deal with UltraTech hits roadblock

ICICI Bank, the lead banker for Jaiprakash Associates Limited (JAL), has invoked the strategic debt restructuring (SDR) provision, setting in play the process that could pave the way for the lenders cumulatively taking over the company. The development comes amid uncertainty over the sale of JAL’s cement assets to Kumar Mangalam Birla-owned UltraTech Cement. (Link)

#general: Cyprus treaty: India gets right to tax capital gains

The country’s renegotiated tax treaty with Cyprus will provide for taxation of capital gains in India arising from sale of shares of desi companies. However, all investments undertaken prior to April 1, 2017, will be grandfathered. A release issued by the Cypriot m
inistry of finance says, “The agreement reached provides for source-based taxation for gains from the alienation of shares. (Link)

#stocks-fundamentals: Yarn mills faced with difficult odds as domestic cotton prices spurt

If the trend continues, then mills, especially the mid- and small-sized units, will take a beating on margins. (Link)

#general: Abolishing The Income Tax: Lessons from Mahabharata

(Link) 

#general: Flipkart’s valuation marked down again signalling continuing pain in E-commerce

After facing series of markdowns in recent past, India’s e-commerce giant Flipkart has been subject to yet another markdown, this time by a mutual fund managed by the US-based investment firm Vanguard Group.

The move once again signifies the crazy billion-dollar valuations most of the E-commerce firms commanded at the height of the e-com boom despite a lack of strategy on the profitability front. (Link)

#general: CAG wants to audit RBI amid risks, scandals in financial sector

In India, CAG does not audit the RBI, whose auditors are appointed by Central Government under the provisions of the RBI Act. CAG conducts audit of other financial sector regulators like SEBI, IRDA and PFRDA but does not conduct performance audits.

“In the light of the growing incidents of financial frauds, it is a thought for consideration as to whether, in future, our audit should look into the risks and vulnerabilities facing our financial sector as well as the ability and effectiveness of regulators to mitigate such risks,” Sharma said at a Assocham conference on financial frauds. (Link)

#backtobasics:

Basics of Trading Options: Online WebinarLink

What is Window Dressing? – Link

Calendar Straddle Explained – Link

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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.