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Market update 27th May 2020. Nifty, Sensex witness the best trading day of May.

Market update 27th May 2020. Nifty, Sensex witness the best trading day of May.

 

Overall performance:

Today, Indian indices ended on strong note with NIFTY above 9,300 and SENSEX crossed 31,000 mark supported by banking stocks. When market closed, SENSEX was up by 995.92 points or 3.25%, closing at 31,605.22 and NIFTY was up by 285.90 points or 3.17%, closing at 9,314.95. The S&P BSE midcap index was up by 61.25 points or 0.54%, closing at 11,467.83 and S&P BSE Small cap increased by 28.59 points or 0.27%, closing at 10,619.01. NIFTY Midcap 100 closed at 12,911.25, up by 75.60 points or 0.59%, closing at 12,911.25 and NIFTY Small cap 100 closed at 3,905.60, up by 25.40 points or 0.65%.

 

Global indices and commodities:

When Indian market closed, DAX was trading at 11,694.73 up by 190.08 points or 1.65%. NASDAQ was trading at 9,340.22 up by 15.63 points or 0.17% and CAC was trading at 4,685.20, up by 1.71% or 4,687.35 points. While, SGX Nifty was up by 275.50 points or 3.05% and trading at 9,297. Currently, Gold is trading at 46,105 down by 217 points and 0.47%, Silver is trading at 47,900 up by 79 points and 0.17% and Crude oil is trading at 2,574.

 

Currency:

At the closing time of Indian indices, almost all the currencies were trading on a high note. USD was trading at Rs 75.72, up by 0.07% or 0.05 points. EURO was trading at 83.34, up by 0.63% or 0.52 points and GBP was trading at Rs 93.22, up by 0.22% or 0.21 points.

 

Sector:

Today, almost all other sectors ended on higher note, expect for Pharma sector. The S&P BSE Auto index increased by 110.43 points or by 0.83%, closing at 13,390.53 and BSE Bankex gained 1,465.45 points or 7.31%. While, S&P BSE Health care fell by 129.96 points or 0.84%. When market closed, NIFTY BANK was up by 1,270.20 points or 7.28%, closing at 18,710.55. NIFTY IT increased by 377.95 points or 2.78%, closing at 13,952.90 and NIFTY Auto increased by 42.65 points, closing at 5,896.95. While, NIFTY Pharma fell by 19.80 points and closed at 9,463.70.

 

Top 5 gainers:

Today, banking and financial sector performed well as most of the gainers are from banking sector. Share price of Axis bank increased by 45.70 points or 13.39%, closing at Rs 387, ICICI Bank gained 26.15 points or 8.93% and closed at Rs 318.85. Wipro shares increased by 12.45 points or 6.59%, closing at Rs 201.25. Share price of Grasim gained 34 points or 6.38%, closing at Rs 566.65, HDFC Bank was up by 51.25 points or 6.01% and closed at Rs 903.65 and Bajaj Finance increased by 107.45 points, closing at Rs 1936.45.

 

Top 5 losers:

Today, Sun Pharma declined by 8.25 points or 1.80%, closing at Rs 450.90. Ultra tech cement which is increasing from last few days, today declined by 1.55% or 58.60 points, closing at Rs 3,727.40, Shree Cements decreased by 189.75 points or by 0.92%, closing at Rs 20,477.55. Share price of Titan Company fell by 6.90 points or 0.77%, closing at Rs 885.85 and Asian Paints shares declined by 10.40 points or 0.64%, closing at Rs 1,619.45.

 

Stock in news:

Most active stock by volume were stocks such as Vodafone Idea, ICICI Bank, IDFC First Bank, Axis Bank, ITC, Adani power, Tata power, BHEL and SBI. Today most of the stocks of banking sectors were in news as their stocks hiked over 8%, which includes stocks such as Axis bank which increased by 13.39%, closing at Rs 387. ICICI Bank increased by 8.93% and closed at Rs 318.85.

 

 

Market Update 26th May 2020. Pharma and IT stocks decline.

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Weekly market update (18th May - 22th May).

Weekly market update (18th May – 22th May).

Overall performance:

 Fluctuation was seen in market due to many reasons such as resurgence trade tensions between China and US, rate cut by RBI and disappointing reaction for stimulus packages. On  18th May, SENSEX opened at 31,097.73 and closed at 30,028.98 (down by 1,068.75) while, on Friday market closed at 30,672.59 down by 425.14 points or 1.367 percent compared to opening price on Monday. On the other hand, NIFTY touched low at 8,800 during mid-week.

On Monday, NIFTY opened at 9,136.85 and closed at 9,039.25 on Friday lower by 97.6 points or 1.06 percent. However, the S&P BSE small-cap index increased by 10% to 30%. Around 30 stocks increased in small cap which includes Zen Technologies, Alok industries, Sintex Industries, Prozone Intu Properties Ltd and India cements. While, NIFTYBANK declined by more than 8%.

 

Global indices, currencies and commodities:

DAX was trading at 10,749.56, up by 287.16 points or 2.74%, on Monday while today it is trading at 11,073.87 up by 7.94 points and NASDAQ was trading at 9,014.56 up by 70.84 points or 0.79% while now it is trading at 9,324.59, up by 39.71. CAC was trading at 4,366.26, up by 2.07% or 88.63 points, now trading at 4,444.56, down by 0.89 points.

When market closed on Monday, Gold was trading at 47,858 up by 489 points and is now trading at 47,056. Silver was trading at 48,552 and is currently trading at 48,338, up by 1,003 points. On Monday, at the time of closing of Indian indices, USD was trading at Rs 75.91 which is now trading at Rs 75.95. EURO was trading at Rs 82.20, currently trading at Rs 82.79 and GBP was trading at Rs 92.19 which is now trading at Rs 92.58.

 

Sector wise update:

On Friday, NIFTY BANK decreased by 456.20 points or 2.57%, closing at 17,278.90 which was trading around 18,529 on Monday. While other sectors like Pharma and Auto sectors increased around 2%-5%.

 

Top 5 gainers:

This week, share price of ITC increased by 13.18% or by 21.70 points, closing at Rs 186.35, Cipla gained 69.05 points or by 12.11%, closing at Rs 639.3. Shares of Mahindra and Mahindra jumped by 11.81 percent or 45.05 points, closing at Rs 426.35. Bharti Airtel’s share price increased by 39.10 points or 7.06 percent, closing at Rs 593.20 this week, and share price of TCS gained 127.45 points or 11 percent this week and closed at Rs 2,020.35.

 

Top 5 losers:

Mahindra & Mahindra Financial Services share price fell by 6.31 percent or by 8.60 points and closed at Rs 127.60. This week, share price of Shriram Transport Finance decreased by 5.78 percent or 33.20 points, closing at Rs 541.40. Axis Bank fell by 5.65 % or 20.20 points, closing at Rs 337.10. Ashok Leyland shares declined by 5.42 percent or 2.50 points, closing at Rs 43.60 and share price of Power Finance Corp declined by 5.31% or 4.20 points and closed at Rs 74.90 on Friday.

 

Which stocks were in news?

This week, various companies were scheduled to announce their March quarter earnings. This is includes companies such as D-mart (Avenue Supermart), JSW steel, DCB Bank, Alembic Pharma, Bosch, Colgate, Bayer cropscein, UPL, Birla Corp, IDFC first Bank, JSW steel, Bajaj Auto, Cipla and Bharti Airtel. Among these companies, many posted loss for Q4 FY20 which affected their shares. Many stocks from Pharma and Auto sector were also in news as share prices of auto companies such as M&M and Hero MotoCorp increased by 2% to 6%. While, Pharma companies stocks such as Cipla and Dr Reddys labs increased by 4%-10%.

Most active stock by volume were Vodafone Idea, SBI, HUL and Maruti Suzuki, Reliance Power, Axis bank, Yes bank, Tata Power, India Bulls and Bharat Electronics. On Friday, around 31 stocks touched their 52 week low which includes Bajaj Finance, Chennai Petroleum Corporation, SBI, ABB, India Bulls, Cyient, The Karnataka Bank and Power Finance Corporation. IRCTC was in news as bookings for passenger trains started and their shares are increasing and again locked in 5% upper circuit (for 2nd time). On Friday their shares gained 22.70 points, closing at Rs 1,422.70.

 

 

Airport Authority of India provides new air travel guidelines.

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Market update 22nd May 2020. Financials dip after RBI's announcement.

Market update 22nd May 2020. Financials dip after RBI’s announcement.

 

Overall performance:

Indian indices ended on low note today, mostly dragged by banking and financial sector stocks. When market closed, SENSEX was down by 260.31 points or 0.84%, closing at 30,672.59 and NIFTY was down by 67 points or 0.74%, closing at 9,039.25. While, the S&P BSE midcap index was down by 93.82 points or 0.83%, closing at 11,270.02. S&P BSE Small cap decreased by 23.90 points or 0.23%, closing at 10,524.23. NIFTY Midcap 100 closed at 12,668.05, down by 94.60 points or 0.74%, closing at 12,668.05 and NIFTY Small cap 100 closed at 3,850.85, down by 24.35 points or 0.63%.

 

Global indices and commodities:

When Indian market closed, DAX was trading at 11,016.77 down by 49.16 points or 0.44%. NASDAQ was trading at 9,284.88 down by 90.90 points or 0.97% and CAC was trading at 4,435.93, down by 0.21% or 9.52 points. While, SGX Nifty was down by 45.50 points or 0.50% and trading at 9,035.50. Currently, Gold is trading at 46,965 up by 577 points and 1.24%. Silver is trading at 47,719 up by 415 points and 0.88%. Crude oil is trading at 2,424 which is declined by 139 points and 5.42%.

 

Currency:

At the closing time of Indian indices, USD was trading at Rs 75.95, up by 0.34%. EURO was trading at Rs 82.69, down by 0.11% and GBP was trading at Rs 92.32, down by 0.10%.

 

Sector:

Among the sectors, IT, Auto, Pharma and media sector ended on high note but banking and financial sector ended on low note. The S&P BSE Auto index increased by 48.79 points while, S&P BSE Energy declined by 18.29 points or 0.41%,.BSE BANKEX fell by 497.17 points or 2.44%. At closing, NIFTY BANK decreased by 456.20 points or 2.57%, closing at 17,278.90 while, NIFTY IT increased by 194.75 points or 1.43%, closing at 13,842.65.

 

Top 5 gainers:

Today, share price of Zee Entertainment increased by 9.30 points or 6.04%, closing at Rs 163.25. Mahindra & Mahindra which is increasing from the last few days, gained 18.05 points or 4.42% and closed at Rs 426.35. Shares of Cipla increased by 22.75 points or 3.69%, closing at Rs 639.35. Shree Cements increased by 659.10 points or 3.42%, closing at Rs 19,910.25 and Infosys was up by 20.15 points or 3% and closed at Rs 692.35.

 

Top 5 losers:

Today, shares which declined the most were from the banking or finance sector. Axis bank declined by 20.25 points or 5.67%, closing at Rs 336.95. HDFC shares declined by 5.08% or 81.15 points, closing at Rs 1,516.15. Bajaj Finserv decreased by 223.65 points or by 4.93%, closing at Rs 4,315.55. Share price of Bajaj finance fell by 94.90 points or 4.77%, closing at Rs 1,895.30 and ICICI Bank declined by 13.35 points or 4.39%, closing at Rs 291.05.

 

Stock in news:

Shares of Pharma and Auto sectors ended on high note. IRCTC was in news after booking for passenger trains started their shares are increasing. Today it increased by 22.70 points, closing at Rs 1422.70. Today, around 31 stocks touched their 52 week low which includes Bajaj Finance, Chennai Petroleum Corporation, SBI, ABB, India bulls, Cyient, The Karnataka Bank and Power Finance Corporation.

Zee entertainment was in news as share price of the company increased by 6.04 percent and closed at Rs 163.25. Also, Mahindra & Mahindra gained 4.42%, closing at Rs 426.35 . Other than these stocks, most active stocks in terms of volume were Vodafone idea, SBI, ICICI Bank, BHEL, Bank of Baroda, Axis Bank and IDFC First Bank in terms of volume.

 

 

Airport Authority of India provides new air travel guidelines.

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Market update 21st May 2020. ITC record biggest one-day gain in nearly 2 months.

Market update 21st May 2020. ITC record biggest one-day gain in nearly 2 months.

 

Overall performance:

Indian indices ended on high note. While market closed, SENSEX was up by 114.29 points or 0.37%, closing at 30,932.90 and NIFTY was up by 39.70 points or 0.44%, closing at 9,106.25. While, the S&P BSE midcap index was up by 85.62 points or 0.76%, closing at 11,363.84 and S&P BSE Small cap increased by 75.76 points or 0.72%, closing at 10,548.13 NIFTY Midcap 100 closed at 12,762.65, up by 98.45 points or 0.78% and NIFTY Small cap 100 closed at 3,875.20, up by 23.45 points or 0.61%.

 

Global indices and commodities:

When Indian market closed, DAX was trading at 11,067.85 down by 155.86 points or 1.39%. NASDAQ was trading at 9,375.78 up by 190.68 points or 2.08% and CAC was trading at 4,452.40, down by 0.99% or 44.58 points. While, SGX Nifty was down by 18.50 points or 0.20% and trading at 9,064.50. Currently, Gold is trading at 46,692 down by 451 points and 0.96%. Silver is trading at 48,101 down by 957 points and 1.95%. Crude oil is trading at 2,604 which is up by 84 points and 3.33%.

 

Currency:

At the closing time of Indian indices, almost all the currencies were trading at a lower note. USD was trading at Rs 75.60, down by 0.25%. EURO was trading at Rs 82.84, down by 0.11% and GBP was trading at Rs 92.38, down by 0.10%.

 

Sector:

Today, almost all other sectors ended on higher note, expect for the banking sector. The S&P BSE Auto index increased by 311.34 points or by 2.45% and S&P BSE Energy gained 22.61 points or 0.51% while BSE CDGS increased by 2.09%. At closing, NIFTY BANK decreased by 105.10 points or 0.59%, closing at 17,735.10 and NIFTY IT and AUTO increased by 130.55 points and 146.10 points respectively.

 

Top 5 gainers:

Share price of ITC increased by 13.20 points or 7.51%, closing at Rs 188.95. Hindalco gained 129.50 points or 7.20% and closed at Rs 129.50. Asian paints increased by 74.25 points or 4.95%, closing at Rs 1,574.30. Hero MotoCorp increased by 95.90 points or 4.74%, closing at Rs 2,119.50 and Maruti Suzuki was up by 158.15 points or 3.23% and closed at Rs 5,050.10.

 

Top 5 losers:

Bajaj Finserv declined by 162.85 points or 3.46%, closing at Rs 4,539.20. IndusInd bank which is declining from the last few days, declined by 2.94% or 10.50 points, closing at Rs 346.80. NTPC decreased by 2.65 points or by 2.85%, closing at Rs 90.25. Share price of Bajaj Finance fell by 52.60 points or 2.57%, closing at Rs 1,990.20 and Adani ports declined by 6.60 points or 2.04%, closing at Rs 317.15.

 

Stock in news:

Hero MotoCorp was in news as share price of the company increased by 95.90 points and closed at Rs 2,119.50. Also, IRCTC locked in upper circuit at 5% for the second day, closing at Rs 1,400 after bookings for passenger train started. Other than these stocks, most active stocks were Vodafone idea, SBI, ITC, Bank of Baroda, ICICI Bank and Alok Leyland in terms of volume.

 

 

Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

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Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

Market update 20th May 2020. SENSEX, NIFTY close on a positive note.

 

Overall performance:

Today, for the second consecutive day Indian indices ended on a high note. As market closed, SENSEX was up by 622.44 points or 2.06%, closing at 30,818.61 and NIFTY was up by 187.45 points or 2.11%, closing at 9,066.55 While, the S&P BSE midcap index was up by 166.09 points or 1.49%, closing at 11,278.22 and S&P BSE Small cap increased by 117.19 points or 1.13%, closing at 10,472.37. NIFTY Midcap 100 closed at 12,664.20, up by 193.50 points or 1.55% and NIFTY Small cap 100 closed at 3,851.75, up by 39.80 points or 1.04%.

 

Global indices and commodities:

When Indian market closed, DAX was trading at 11,136.49 up by 61.20 points or 0.55%, NASDAQ was trading at 9,185.10 down by 49.73 points or 0.54% and CAC was trading at 4,452.75, down by 0.12% or 5.41 points. While, SGX Nifty was up by 259 points or 2.94% and trading at 9,083.00. Currently, Gold is trading at 47,203 up by 153 points and 0.33%, Silver is trading at 49,045 up by 227 points and 0.46%. Crude oil is trading at 2,442 which is up by 40 points and 1.67%.

 

Currency:

At the time of closing of Indian indices, USD was trading at Rs 75.79, up by 0.21%. EURO was trading at Rs 82.80, up by 0.22% and GBP was trading at Rs 92.79, up by 0.13%.

 

Sector:

Today, almost all other sectors ended on a high note. The S&P BSE Auto index rose by 258.63 points and S&P BSE Energy rose by 84.07 points or 1.93%. At closing, NIFTY BANK increased by 353.95 points or 2.02%, closing at 17,840.20 while, NIFTY IT increased by 70.80 points or 0.53%.

 

Top 5 gainers:

Share price of Shree Cements increased by 1,070.90 points or 5.84%, closing at Rs 19,411.65. Mahindra & Mahindra gained 22.15 points or 5.78% and closed at Rs 405.05. Shares of Dr Reddys Labs increased by 210.60 points or 5.69%, closing at Rs 3,910.20. HDFC gained 87.15 points or 5.66%, closing at Rs 1,627 and Eicher Motors was up by 708.90 points or 5.47% and closed at Rs 13,675.10.

 

Top 5 losers:

Today, Bharti Infratel declined by 17.90 points or 8.18%, closing at Rs 200.85. Vedanta, which is decreasing from last 2 days, declined by 1.61% or 1.45 points, closing at Rs 88.55, IndusInd bank decreased by 10.50 points or by 2.85%, closing at Rs 357.30. Share price of Hero MotoCorp fell by 49.90 points or 2.41%, closing at Rs 2,023.60 and Bharti Airtel declined by 4.75 points or 0.79%, closing at Rs 594.05.

 

Stock in news:

Today, shares of Pharma, banking and Auto sectors ended on higher note. Shree cements was in news as share price of the company increased by 1,070.90 points and closed at Rs 19,411.65. Bharti Infratel was also in news as today their share price decreased more than 8%, closing at Rs 200.85 and Mahindra and Mahindra shares which was declining since last few days, today gained 22.15 points. Other than these stocks, most active stocks were Vodafone idea, SBI, Tata powers, ICICI Bank, BHEL and Alok Industries in terms of volume.

 

 

FPIs exit markets after economic package announcement.

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BSE, NSE cut listing fees for SMEs

BSE, NSE cut listing fees for SMEs

 

Due to COVID-19 pandemic, all the sectors have been affected badly but SMEs segments are affected the most. Therefore, during the announcements of details of Rs 20 lakh crore stimulus package, Finance minister Nirmala Sitharaman made special announcements related to MSMEs.

 

Reduction in listing fees:

Now to support SMEs and MSMEs, Indian stock exchanges BSE and NSE came forward. They have relaxed listing norms and reduced listing fee for small and medium enterprises by 25%. However, this norms are applicable to both existing and new firms which are looking forward to list on BSE SME platform and NSE SME platform.

 

What are the Current charges?

Currently for SMEs, Rs 25,000 or 0.1 percent of market capitalization of firm is the listing fee charged by BSE. The NSE charges around Rs 10,000 to Rs 45,000, depending on the SME firms market capitalization. Until now, BSE has 322 small and medium companies listed and has raised around Rs 3,278.84 crore from the market. Their market capitalisation is of Rs 15,865.39 crore so far. On the other side, so far only 209 small and medium companies are listed on NSE and have raised over Rs 3,200 crore.

 

What measures have been announced by government?

Due to the covid-19 lock down, many industries are facing problems like job losses and are cash strapped. During this situation, the main concern for MSMEs is that they are not able to restart their operations due to supply issues and non-availability of labour. Last week, while making announcement for packages in tranches, government changed the definition for MSMEs and linked it to the turnover limits of the companies so that their businesses grow with benefits. They announced measures for MSMEs and Rs 3 lakh crore package for collateral free automatic loans with separate funds for equity support.

However, these Rs 3 lakh crore will also be useful for existing borrowers who have over Rs 100 crore turnover and Rs 25 crore outstanding. Fresh loans can be taken by companies up to 20% of their outstanding. These loans have tenure of 4 years, with moratorium repayment period of 12 months. However, the government will also give them credit guarantee of 100 percent which will cover interest and principal to banking and non-banking institutions. Government will give around Rs 4,000 crore funds to Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE) with partial credit guarantee to banks. However for expansion of MSMEs, the government will provide corpus of Rs 10,000 crore so that they can also list after expansion.

 

Further Expectations:

Micro, small and medium enterprises (MSMEs) are very cautious while taking any kind of fresh loans, as they are not sure about the demands for their products after all activity resumes. Most of the micro, small and medium businesses and enterprises are expecting from the government, to give them direct relief by waiving their electricity bills and other fixed expenditure such as payment of salaries. However, banks have already reduced their loans such as credit limit. Anil Bhardwaj, Secretary general of federation of Indian micro, small & medium enterprises (FISME) said, for all the small business and enterprises, government will take care of their fixed expenses. MSME industry has three major demand, interest payments, easy access to loans and payments of salaries from the government, during this situation due to COVID-19 lock down.

 

 

FPIs exit markets after economic package announcement.

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FPIs exit markets after economic package announcement.

FPIs exit markets after economic package announcement.

 

On 12th May 2020, Prime Minister Narendra Modi announced an economic package of ₹ 20 lakh crore under government’s Atma Nirbhar Bharat Abhiyan / Self-Reliant India. The national movement of Atma Nirbhar Bharat Abhiyan / Self-Reliant India initiated by Prime Minister Narendra Modi is to support India’s all small and local business. He emphasized on slogan viz. #VOCALFORLOCAL.

 

Scamper among FPIs:

Approximately 40% of FPI sales in cash and derivatives sectors were observed in second week of May. The data derived from stock exchange indicates some break up figures such as FPI’s sold stock worth ₹6,486 crore. Additionally, sales worth ₹2,869 crore and ₹737 crore were observed in index futures and stock futures respectively. These sales was executed in just 4 trading days in the second week of May 2020. The data further states that since the announcement of economic booster package of worth ₹20 lakh crore, FPIs buying activity has drastically declined.

 

Decline in NIFTY:

On 13th May 2020, Nifty observed its peak of 9,584 within the span of 2 days. Nifty abruptly fell by 534 points and on 15th May 2020 Nifty observed its low of 9,050. In the same time period, it has also been observed that there is a sudden decline in Nifty Bank. Nifty Bank dropped 1,440 points from 20,122 to 18,663.

If we compare between Indian stock market and global stock market, the sudden change is only observed in Indian stock market and not in global stock market. The Nifty and Nifty Bank indices are two of India’s largest traded derivatives, and both of these derivatives are struggling under pressure from FPI’s as they are selling their investment in a massive quantity since the announcement of economic booster package by Indian government. In second week of May 2020, the indices decreased by 5.6% and 7.15% respectively, compared to their respective highs.

 

Support from DII’s:

During the same period i.e. in the second week of May, there was no support from Domestic institutional investors (DIIs). Purchases from domestic institutional investors (DIIs) was also low, and they purchased stocks of only ₹1,896 crore in cash. There are several rules and restrictions on the companies who are doing business of mutual funds & insurance on derivative speculations. Therefore, they are virtually absent in the field of futures and options.

 

Massive sales by FPIs:

The media report noted that FPIs have been selling massively since the second week of May 2020 and have been slamming markets after the announcement of the financial package by Indian Government. In addition, the figures apart from second week of May 2020, the FPI’s net figures appear to be clearly positive, this is a bit misleading.

 

Loopholes while extracting data:

Exchanges will not adapt these facts when foreign companies sell shares and FPIs buy them This was the case on 7th May 2020, when a massive block of shares entered the market of Hindustan Unilever (HUL). Shares of HUL worth ₹26,300 crore were sold by international investors on 7th May 2020. The FPI’s bought a total worth ₹19,000 crore from the market in the same period, while DIIs bought stocks from the market in the same period worth ₹3,818 crore. Nearly all FPI’s and DIIs purchases were in HUL for that particular period.

When these ₹19,000 crore investments are removed from Hindustan Unilever shares, then FPI’s were net sellers in the cash and future segments. Sellers and major buyers of HUL were both international entities, but only those registered as FPIs are required to report their numbers to Securities and Exchange Board of India (SEBI) and stock exchanges viz. NSE & BSE. Meanwhile, net buying by DIIs in the month of May 2020 is just ₹1,056 crore after adjusting the activity of Hindustan Unilever.

 

 

Corporate bond funds: A mix of risks and returns.

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BSE, NSE to launch rupee derivative contracts

BSE, NSE to launch rupee derivative contracts

 

The NSC IFSC  and India INX have introduced rupee derivatives which will help in bringing much needed added liquidity in the economy. This will supplement their customers with several investment options.

The motive behind introduction of rupee derivatives:

The CEO of NSE, Vikram Limaye communicated to the media that the introduction of rupee derivatives will help in the development of (Gujarat International finance tech) GIFT IFSC as a hub of global financial services. This IFSC platform will help in the rupee exposure of non resident participants. This non residents’ participation will also enhance the IFSC’s extended trading hours and USD settlement. They’ve already received permissions for offering securities trading in any currency except the Indian rupee.

 

Importance of introduction of rupee derivatives:

Mr. Limaye added that this measure will enhance the efficiency of Indian rupees’ price discovery. It will be done by eliminating the onshore and offshore markets’ segmentation. It will also allow for trading and hedging using rupee derivatives contracts to their trading partners viz. IFSC entities and banking units. The Finance Minister Nirmala Sitharaman did the inauguration of the rupee derivatives contract. The contract will be having a lot size in NSE IFSC – Rs 20 lacs and India INX – Rs 10 lacs and the contract will be settled in cash.

 

The futures and options:

The futures at the NSE IFSC will have in total three monthly expiry contracts . The options at NSE IFSC will have total seven weekly and three monthly expiry contracts. For the other one i.e India INX, there will be in total eleven weekly and twelve monthly contracts. In the past few months due to the corona virus pandemic crisis, there is an acute volatility faced by the currency markets. The introduction of rupee derivative contracts in the IFSC will lead to more stability during these situations.

 

The Contracts:

The chairman of India INX, Ashishkumar Chauhan communicated to the media that the size of contract will be Rs 10 lacs and the trading is made available from 8th May 2020, 3:30 pm IST. The trading is for both the pairs viz. USD-INR and INR-USD. He added that for the USD-INR product, many of the people like the exporters, importers, traders, etc associated with any kinds of businesses have expressed their keen interest. The Gandhinagar GIFT City is the only IFSC situated in India having zero short term, zero long-term, zero stamp duty and zero transaction taxes as of now.

Each and every businessman interested should consider trading and hedging using rupee derivatives contracts at the GIFT City. The MD and CEO of India INX, V Balasubramaniam communicated to the media that he looks towards the best participation of members and international participants. This will be the first launch of offshore Indian rupee derivatives contract.

 

 

What are liquid funds? Find more

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Investors get relief with standardized digital KYC process

Investors get relief with standardized digital KYC process

 

Know Your Customer (KYC) process generally contain heaps of paper work regarding customer identity and customer acceptance policy. All this makes the KYC process very lengthy and tedious. However, e-KYC is the option available to users but, for e-KYC stock brokers and various online mutual fund platforms didn’t have any standardized or unique set of procedures. E.g. In Person Verification (IPV) is completed by allowing customers by sending their recorded video to the concerned broker while some send their representative to the client’s home for the completion of In Person Verification (IPV).

 

New standard and unique procedure for Digital KYC:

Due to the unusual wake of Covid-19, the Indian government and Securities Exchange Board of India (SEBI) came up with standard and unique procedure for Know Your Customer (KYC). Media reports noted that Securities Exchange Board of India (SEBI) fetched responses from various brokers about how the KYC process is executed presently and then they released new standardized norms of how digital KYC should be executed.

 

Details regarding Aadhar based KYC:

A notification was published by Finance ministry of India on 22nd April 2020, regarding KYC process to be completely digitized for transactions through some institutions. Notification states that 9 institution’s viz. Link Intime India Pvt Ltd, CDSL Ventures Ltd, Bombay Stock Exchange (BSE), CAMS Investor Services Pvt Ltd, Central Depository Services (India) Ltd, and National Stock Exchange (NSE) can now undertake Aadhar based e-KYC. Notification noted that all the 9 institutions follow all the standards of privacy and security under the Aadhaar Act 2016.

 

Details regarding Online KYC:

Securities Exchange Board of India (SEBI), clarified the KYC process and its functioning. SEBI notified various online services that Mediators can practice for completion of KYC process.

 

Some of online KYC are followed:

 

Aadhaar eSign

Aadhaar eSign is the method recommended by government, in which we can digitally sign a document using Aadhaar. It will be equivalent to the normal sign we do, i.e. physical sign using pen. This will be completed using One-Time Password (OTP).

 

Digilocker

Digilocker is an initiative of Central government. It allows an individual to store their personal documents online using cloud storage provided by Digilocker. It provides free upload of documents up to 1 GB. Users can store their PAN card, Driving Licence and other important documents. Digilocker is fully secured, while creating an account. The 12 digit Aadhaar number is compulsory and further every time you login to Digilocker, a 4 digit One-Time Password (OTP) will be sent on the linked mobile number with Aadhaar. Digilocker allows you to sign digitally through their platform. Securities Exchange Board of India (SEBI), allowed verification of documents for KYC process using Digilocker. Documents uploaded on Digilocker can be treated as original documents.

 

In Person Verification (IPV)

In Person Verification (IPV) can be done effortlessly by using mediator’s portal or application. For IPV, a representative from the mediators can connect client through video call and ask some relevant questions. Investor can complete their In Person Verification (IPV) by presenting their original documents on video call.

 

 

The complete procedure of KYC:

The complete KYC procedure will be executed online as per SEBI norms by using broker’s application and online portals. They can cross verify clients by name and all the personal details uploaded by them on Digilocker with digital sign. IPV using video call will ensure all the proofs provided by client are genuine. Aadhaar authentication will be done by the Unique Identification Authority of India (UIDAI) whereas PAN authentication will be done by the database available in Income tax department.

Provision made to check the authentication of bank account is very simple. ₹1 will be deposited in a client’s bank account to verify all the details. This is termed as “Penny Drop” mechanism. Once all the verification is done, clients can download all the documents, do E-Sign on each document and upload it back to the portal. Another way customer can follow is to print all the documents, sign them, and upload the scan copy of it in the portal. Due to all this new measures started by government, investing online is an easy-going task.

 

 

Pre-GST CENVAT credit available till 30th June revised

Equity Right

Jio Platforms acquire investment from Silver Lake

Jio Platforms acquire investment from Silver Lake

After the announcement of Facebook-Jio deal worth $5.7 billion a few weeks ago, Silver Lake, a technology investment firm is to invest $750 million (Rs. 5,655.75 crores) in telecommunications giant Jio Platforms Ltd. The investment is for 1.15% stake of the company at an equity value of Rs.4.90 lakh crores.

 

The Deal:

As per the deal announced by Reliance Industries Limited and Jio Platforms Limited, Silver Lake will invest $750 million in Jio platforms. This investment represents an equity value of Rs 4.9 lakh crores of Jio platforms and takes Jio’s enterprise value to Rs. 5.15 lakh crores. It represents 12.5% premium to the valuation of the investment made by Facebook which bought 9.99% of Jio Platforms Ltd.

Reliance Industries’ wholly owned subsidiary, Jio Platforms mainly focuses on next generation technologies. Reliance Jio Infocomm is a wholly owned subsidiary of Jio Platforms Limited which offers voice over LTE on its 4G network. The regulatory and customary approvals for the transaction are yet to be received. The financial advisor of Reliance Industries was Morgan Stanley. The legal counsel were ASB & partners and Davis Polk and Wardwell.

 

Statements by the CEO:

Reliance Industries Chairman and MD, Mukesh Ambani said that Silver Lake is one of the best technology and Finance firm. RIL is delighted and encourages such global technology relationships which will help them to transform the Indian Digital Society.

The Co-CEO and Managing partner of Silver Lake, Egon Durban said that Jio Platforms has great potential and has the power to bring low-cost Digital services to their customers and also to the small businesses population.

 

How will this deal help the economy?

Jio platforms stated that the COVID-19 pandemic has caused several economic disruptions globally and in India. This partnership with one of the the best technology investors, Silver Lake will have a significant role in revitalization of the Indian economy. The investment by Silver Lake will further help Jio in developing the world class digital platform it has built, powered by Broadband connectivity, Smart Devices, IoT, Blockchain technologies, etc.

Silver Lake is a technology investment firm with over 43 billion combined AUM and committed capital. They have nearly 100 investment and operating professionals worldwide. On 30th April 2020 while announcing its quarterly and annual financial results Reliance Industries said that it will achieve zero net debt status. The company has received proposals from other strategic and financial investors for a similar sized investments. They will announce it the coming months.

 

 

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