A tricky agenda for Nandan Nilekani and for Infosys…   

• The leadership structure needs to be a little clearer. For now, Infosys is going ahead with Pravin Rao as interim CEO, but that is not a permanent solution. Also, a new board has to be constituted with a great degree of urgency.

• Throughout most of its history, Infosys has had the benefit of a weak Indian rupee. That was a natural advantage to Infy’s global growth. With Indian GDP growing at 7.5% and India attracting record FDI inflows, Infosys may now have to contend with a strengthening rupee.

Nandan will have to drive Infy’s big shift towards the digital business. As the man who literally drove UIDAI, that is today the basis for inclusive banking, you cannot hope for a better man for the job. Infy also needs to catch up on lost ground vis-à-vis TCS in this space.

A BEGINNING IS MADE ON PSU BANKING MERGERS…

      The Cabinet on August 23rd gave an in-principle approval for initiating the process of merger of PSU banks. The idea has been under discussion for the last few months and the reasons are not far to seek. Firstly, there is a lot of duplication in the network and operations of most of the PSU banks and hence having so many banks did not add much value. Secondly, banking is increasingly becoming a business that is technology driven and less dependent on geographical presence. Therefore, having so many PSU banks with presence across the length and breadth of India was not required. Lastly, if PSU banks have to survive they need size and a solid balance sheet. In the current situation, this is difficult on a standalone basis considering the weak credit growth and high level of NPAs. The answer lies in merging these PSU banks into smaller clusters to make them more nimble and more competitive. It is in this light that the Cabinet approval needs to be seen.

                                                                                                                                Source:-Angel broking Blog.

 

WHY THIS IPO BOOM MAY ACTUALLY BE DIFFERENT?

        The Indian IPO market helped raise nearly $2 billion during the financial year 2016-17. It is estimated that in the coming year 2017-18, the IPO market will help raise nearly $5.5 billion worth of fresh money. IPO booms are nothing new to India. We have seen IPO booms in 1992, 1994, and 1999 and again in 2007. Each of these IPO booms resulted in excesses in the market and eventually ended up destroying wealth of investors. That is why, as the IPO market has picked up over the last 2 years, the question of whether we are again sitting on an IPO bubble is back in circulation.                                                                                           

                                                                                                         Source:-Angel Broking Blog.

                                                                                                                                 

DYNAMIC FUNDS: WHAT YOU NEED TO KNOW ABOUT THEM…

    A dynamic fund is a recent innovation to the battery of products that mutual funds have been offering to customers. Conceptually, it is almost similar to a balanced fund as it entails a mix of equity and debt in its portfolio. But that is where the similarity ends. A Dynamic Fund is a lot more aggressive in concept as the fund manager has much more leeway to shift the asset allocation either in favour of equity or debt. Here is how it works…

ARE WE UNDERESTIMATING THE ROLE OF TRADERS IN THE STOCK MARKETS?

   How exactly do you define a trader in markets? Frankly, there are no hard and fast definitions but a trader typically tries to move in and out of markets to capitalize on opportunities. Essentially a trader has a short term perspective. This can range from a single day to a couple of months but the role of a trader needs to be understood as distinct from an investor who typically allocates money for the longer term. It is quite normal for traders to bear the chunk of the blame when the markets crash. It is often alleged that overtrading or short-selling by traders led to bubbles which eventually led to value destruction in markets. While this could be partially true, it is also largely unfair to traders. The focus here is to dwell upon some very important functions that traders perform in ensuring the safety and robustness of the market. Remember, while our focus here will be on the equities market, the role of traders is similar in commodity, debt and forex markets too.

                                                                                                                      Source:-Angel Broking Blog.

HOW TIME VALUE OF MONEY CAN WORK IN YOUR FAVOUR…

            To understand the concept of time value of money, we first need to understand that time has a cost. If you keep your money idle under your pillow, then you are losing out on the interest or dividends that you could have earned by investing this money. In economics this is referred to as the opportunity cost of money. When you keep money idle, you are losing out on opportunities to earn returns, which is not what a rational person would do. Since time has a cost, you need to be compensated and that comes in the form of interest payable.

Those who can   buy right and sit tight 

What retail investors need to understand about the buyback?

Retail investors need to understand that the figures that we have been talking about of Rs.13,000 represent the overall buyback offer and it includes institutional shareholders too. As per SEBI regulations small investors need to be offered at least 15% of the total buyback size. Small shareholder here refers to the IPO definition of holdings below Rs.2 lakhs. Thus these small shareholders will be entitled to shares to the tune of Rs.1950 crore (15% of Rs.13,000 crore). The entitlement ratio will eventually depend on the price prevailing on the record date of the buyback and that will be taken as the basis for deciding the entitlement ratio. As of now the record date is not announced and that will determine the eventual entitlement ratio for the retail shareholders of Infosys.

                                                                                                                Source :-Angel Broking Blog.

SO THE INR IS STRENGTHENING; BUT ARE WE MISSING THE PLOT?

     

Back in December 2016, the USD-INR was quoting at Rs.68.5/$. The rupee had weakened sharply in the aftermath of the demonetization drive and was threatening to convincingly break the lows of August 2013. Most currency experts and analysts were of the view that in Real Effective Exchange Rate (REER) terms, the rupee was already overvalued and hence this was more of a fundamental mean reversion. The general consensus (well almost) in December 2016 was that the INR would eventually gravitate towards the Rs.72/$ mark where it would stabilize. Exactly 8 months later, these projections of the INR have gone absolutely awry as the INR has appreciated sharply to the level of Rs.63.84/$.                                                        

                                                                                                                                                                                                                                                                                                                  Source :-Angel Broking Blog.

The recent special bulletin brought out by the NSE on the occasion of the index touching 10,000 had an interesting comparison over the last 12 years time frame. Back in 2005, the weightage of banking and financial services in the overall Nifty was just about 12%, with automobiles, oil and IT having around the same weightage in the index. By 2017, this situation had changed drastically. While the other 3 sectors have lost weightage share in the Nifty, the banking and financial services now account for 35% of the weight in the Nifty. That can be partly attributed to more banks joining the index but is also largely explained by the growth in the value of banking stocks.                                                                                                                       
                                                                                                                              Source;-Angel Broking Blog.

GST could be a game changer for India in the long run.

The Economic survey has specifically underlined that notwithstanding the teething troubles, GST will surely reduce corruption and tax leakage in the economy. GST is likely to bring more of the unorganized sector under the tax ambit and that will broaden and widen the tax base. The bigger advantage of the GST, as noted by the Survey will be the creation of a common single market across India. Currently, too much of transport efficiency and logistical smartness is lost due to impediments to domestic transit of goods. By creating a simplified and unified all-India structure, the GST eliminates these roadblocks altogether. The survey has also highlighted that when the impact of Input Tax Credit (ITC) is also considered, the eventual impact of GST could actually be much lower.

                                                                                                               Source:-Angel broking/Economic survey.  

  

                                                                                                                                                  

                                                                                                                                     

Back to market!!   On Monday market seen good movement in across sectors, also seen many stocks gone up above 50 day moving Average 
Some of open interest also seen built up Like BEML HEXAWARE HDIL. SUZLON, DLF . May see some movement,

Today Indian Market were closed on celebration of 71th Independence Day,

What Next???

Good day ahead if you plan and trade professionally

Speaking of direction, I believe nobody knows the next direction the instrument you trade will move. Nobody. Plenty have ideas and hunches, and often they’ll be right. But the truth is, a coin flip has nearly identical odds. 

This is why I trade options positions that either don’t require me to guess a direction, or provide me with plenty of opportunity to make money even when I’m leaning in the wrong direction.

71st Independence Day Celebrations – PM’s address to the Nation.  

When investing decisions rely more on emotions rather than hard facts, it results in retail investors buying high and selling low. Even, investment experts are prone to bias. Investment experts interpret financial data and global events through the lens of their investment philosophy. Investors have to digest lots of information and react to news events on a daily basis. However, not all events have a material impact on the long-term investment outlook of a stock.

LONG STRADDLE.
Example  :Suppose Nifty is at 4450 on 27th April. An
investor, Mr. A enters a long straddle by
buying a May Rs 4500 Nifty Put for Rs. 85 and
a May Rs. 4500 Nifty Call for Rs. 122. The net
debit taken to enter the trade is Rs 207, which
is also his maximum possible loss.

When to Use: The investor thinks that
the underlying stock / index will
experience significant volatility in the
near term.
Risk: Limited to the initial premium
paid.
Reward: Unlimited
Breakeven:
• Upper Breakeven Point = Strike Price
of Long Call + Net Premium Paid
• Lower Breakeven Point = Strike Price
of Long Put - Net Premium Paid.