EXISTING 500 AND 1000 DENOMINATION CURRENCY NOTES ARE INVALID FROM TODAY

EXISTING 500 AND 1000 DENOMINATION CURRENCY NOTES ARE INVALID FROM TODAY

The success ratio of Income Declaration Scheme is only 20%, so what should be the next logical step to bring back the black money into the system?

In the evening of 08/11/2016, PM Narendra Modi announced that 500 and 1000 rupee currency notes will cease to be legal from midnight.

Way back, Modi announced about Income Declaration Scheme and after increasing the deadline repeatedly, he has suddenly announced the stoppage of use of the 500 and 1000 rupee currency notes. The Income Declaration Scheme was a way to keep atleast 50% of the capital with you and also, it had another extra facility that you won’t have tax raid for the announced money. But now, chance of even the 50% is gone, all the existing 500 and 1000 notes are just a piece of paper from today. Anyone trying to deposit the money in bank and post-office have to follow certain guidelines.

Who is going to benefit the most?

Banks- Savings will increase as people will rush to convert the hard cash to deposit into bank account, thus will lift the national savings. More money power. All these facilities will be passed on to the common man, interest rate, inflation, everything will happen for the good of the economy.

ATM owners- Higher transactions, thereby higher commissions.

Who is going to suffer the most?

Ecommerce sites, Bars, Restaurants, Malls, etc where high value transactions occur everyday

The common people, no one is going to accept the notes, how to buy goods, pay bills, etc. Very few people are tech-savvy. But this problem will be there only for 2-3 days or a week, and things will ease out soon.

Effect: The stock market opened deep red, and made a low of 8002 and then went on to make a high of 8476, around 6% up from day low. The effect was so powerful that even the win of Donald Trumph in the US Elections didn’t affect the Indian market, which was believed to be bad for the international economy.

Personally, I appreciate the step because it will only benefit India both in the longer run and for the greater population.

[Read more...]

TRIGGER FOR THE NEXT MOVE

US stocks post longest slide since 1980, bonds rise amid angst

The world markets are in confusion over the US Presidential Election 2016 and dipped 2% in the past week. The election is stated for November 8th.
Odds are that Hillary Clinton winning the election but Donald Trump is also not far behind.
The  S&P500 dipped for the 9th consecutive day, a 35 year low.
[Read more...]

THE PRICES ARE RISING AGAIN

THE PRICES ARE RISING AGAIN

The inflation has again started to rise up every month.

The CPI rate of July is 6.07% against 5.77% in June.

The WPI rate of July being 3.55% against 1.62% in June.

There is some respite in the data of industrial output which came at 2.1%  in June against 1.2% in May.

We are seeing this rise in prices for some months now, which relates to no possibility of rate cuts in the near future. Remember the CPI data of 6.07% is above the comfort level, both for RBI and PM. Link:http://www.business-standard.com/article/economy-policy/rbi-govt-will-work-to-contain-inflation-at-4-narendra-modi-116080801669_1.html
All this comes at a time when the RBI governor Raghuram Rajan is about to leave for Chicago after his term ends on September 4, 2016. We hope things turn good sooner than later.

BREXIT: UNCERTAINITY

BREXIT: UNCERTAINITY

It was a Black Friday as the capital market all over the world tumbled due to the big event of Britain exiting out of the European Union(EU). It came as a surprise to everyone and more than $2 trillion lost in the global market in just a day (The market cap of Sensex is just below Rs. 1 trillion).

Link:https://www.theguardian.com/business/live/2016/jun/24/global-markets-ftse-pound-uk-leave-eu-brexit-live-updates

Lots of information and expert sayings are already out there in the digital world regarding the Brexit thing. There is a data I found surprising and hence the link: http://www.barstoolsports.com/dmv/the-old-and-uneducated-of-great-britain-voted-to-leave-the-eu-last-night-brexit/

Brexit has happened mainly because of the old and the uneducated ones. Here is the financial connection of India with Europe and UK.

The impact of Brexit on different sectors:

Link: http://economictimes.indiatimes.com/wealth/personal-finance-news/brexit-deep-impact-which-sectors-stocks-will-take-the-hardest-knock/articleshow/52900308.cms

The impact of Brexit is highly negative for United Kingdom, which is why the currency is at 1985 lows, and if the fall continues the inflation can rise and hence, BoE needs to take proper steps. Also its CAD is at 7% of its GDP. News also came that after Britain exiting out of EU, some other nations also want to have an independence referendum similar to Britain, namely Scotland, Ireland, Spain. This will have serious negative impact if happens.

Whatever it be, the outlook for India is quite stable now and it will not be a major dampener for India. 

A LITTLE BIT ABOUT FOODPANDA

In 2015, Pisces eServices, the promoter of Foodpanda India, had reported losses of Rs 36 crore on the back of revenues of Rs 5 crore. The company is working on a commission model, which stands between 10-25 percent on each order, and “in certain cases, 35 percent”, focusing on delivery times, Foodpanda CEO Saurabh Kochhar told PTI.

CPI UP, WPI UP, IIP DOWN AGAIN

Once again, the CPI, WPI increased while the IIP contracted.
CPI increased from 5.47%(revised) in April to 5.76% in May, mainly because of food inflation.
WPI increased from 0.34% in April to 0.79% in May, mainly because of egg,fish,meat.
IIP decreased from 0.01% in March to 0.8% in April, mainly because of manufacturing.

FOLLOW-UP OF MEDIUM TERM STOCK PICKS

FOLLOW-UP OF MEDIUM TERM STOCK PICKS GIVEN ON 07.03.2015

ON 07.03.2015 I HAVE GIVEN SOME STOCK PICKS FOR MEDIUM TERM INVESTMENT.

LINK:http://dipesh-majumdar.blogspot.in/2015/03/medium-term-stock-picks-stock-sector.html

A LOOK AT THE PICKS, HOW THEY HAVE PERFORMED:

LINK:https://docs.google.com/spreadsheets/d/1xdvda-bZreBNXpH4khivRUhMGyobL1ka5O1dB78XoDM

8 PICKS HAVE HIT THE TARGET OUT OF 13.
A RETURN OF 28% AND AN OPTIMIZED RETURN OF 40% OVER RECOMMENDED PRICE IS TRULY AMAZING.

FOOTNOTE 1:  %RETURNS HAVE BEEN CALCULATED USING THE TARGET AND %OPTIMIZED RETURNS HAVE BEEN CALCULATED BY USING THE HIGH AFTER RECOMMENDATION
FOOTNOTE 2: GRANULES SPLIT ITS FACE VALUE FROM 10 TO 1, AND COLGATE FROM 2 TO 1, RESPECTIVELY

VERY FEW MUTUAL FUNDS HAVE ACHIEVED BETTER PERFORMANCE IN TERMS OF RETURNS.
AND ALL THIS COMES AT A TIME WHEN NIFTY HAS GIVEN NEGATIVE RETURNS.
THANKS TO ALL MY BLOG READERS.

A SHORT PRESENTATION ON TRADING

RBI KEEP RATES UNCHANGED AND GROWTH IN GDP

The Reserve Bank of India has kept all the rates unchanged. The target of CPI inflation at 5% by March 2017 is still on. There are no repo rate cuts possible in the near term because-

• Inflation and industry output data are not supporting a rate cut.
• If there is a weak monsoon the food prices will go up.
• Banks have not yet passed all the previous rate cuts to the consumers.

For more information:http://indianexpress.com/article/business/banking-and-finance/rbi-repo-rate-raghuram-rajan-latest-updates-interest-rates-policy/

Previously, the GDP data came in which showed a growth of 7.9% growth q-o-q and thereby 7.6% for the full fiscal year 2015-16 against 7.2% for the previous fiscal. Seeing this, the Govt has projected a growth rate of 8% for the current fiscal. The growth has been backed by manufacturing. 

For more information:http://economictimes.indiatimes.com/news/economy/indicators/indias-growth-at-7-6-in-2015-16-fastest-in-five-years/articleshow/52522153.cms

THIS IS CALLED STOCK MARKET

This is the quote price of Larsen and Toubro 1420 CALL option of May expiry of 26th May 2016.
L&T announced good set of numbers in its quarterly results and the market gave a thumbs-up, resulting in 14% increase in its stock price.
Well, the scenario is far more impressive when it comes to options. The price of the call option went from Rs 0.25 to Rs 60 within just 24 hours, thats a humongous 240 times!
This is called stock market..the kind of money that can be made if you are right. Not everytime it happens when a company results are good!
And there is a bad side of options trading also, as mostly people lose money in options because of these kind of expectation of huge returns.
Well, lets go a bit into the core of this price surge.
A price movement of 14% in an underlying security itself can increase the value of a put/call option 7-8 times in any day of a month, even if its the first day of an expiry. And here it was the day of the expiry. Hence the THETA rule works on its own, due to which the price jumped so much as the days to maturity was 0. There is an inverse relationship in % change in option price movement and the number of days left for its maturity (or the day of expiry). And this is why all the out-of-the-money option prices become zero at expiry.
For, better understanding, you can chek out this link:http://dipesh-majumdar.blogspot.in/2015/03/understanding-option-greeks-use-of.html