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. (If you’re a trial member this probably sound like Greek to you; it will be available when you sign up!)
A brief summary of some of the interesting things discussed there in the last few days:
#general: What’s Happening at IBM? (It’s dying)
This is a column I didn’t want to write. Like many of you I am tired of IBM stories and the company that was once an industry leader has become, at best, a poster child for how not to manage the later stages of a corporate life cycle. But because what’s happening at IBM is also happening right now at hundreds of other big technology companies makes it worth covering.So let me be clear: IBM is dying.
#stocks: Supreme Court gives RBI Six Weeks to Submit List of Biggest Loan Defaulters
The Supreme Court on Tuesday took suo moto cognizance of newspaper reports on bad loans and has, therefore, directed the Reserve Bank of India (RBI) to give it the list of the biggest defaulters.
The apex court asked the RBI to share its record about cases where loans of Rs 500 crore or more have been written off by public sector banks.
#general: High School Dropout Designed A Refrigerator That Runs Without Electricity
Have you ever heard of Mitticool? Literally meaning ‘cool with clay’, the company is the brainchild of Mansukhbhai Prajapati, a tenth-fail former laborer and tea- who created an innovative solution to a problem millions of poor face across the world – he created a low-cost refrigerator from clay!
#stocks: How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup
A decade after taking over, Jeff Immelt’s long bet on the Internet of Really Big Things seems to be paying off.
#macronomics: RBI Relaxes Norms for Banks Holding Power Utilities’ Debt
The Reserve Bank has provided some relief to banks holding bonds of debt-ridden State Electricity Boards (SEBs) that were issued to them as part of the cleaning up exercises of these power utilities.
According to sources, banks have been allowed to keep Ujwal Discom Assurance Yojana (UDAY) scheme bonds under the held-to-maturity (HTM) category.
#stocks: Free trade: Share-trading Joins the List of Ostensibly Free Online Services
BACK in the 1970s, after American regulators abolished fixed commissions for brokers who helped their clients trade shares, the likes of Charles Schwab and Fidelity were the insurgents. They dispensed with the expensive frills that most rivals offered, such as research and investment advice. That, in turn, allowed them to offer share trading to the masses at bargain prices. Twenty years later, the internet spurred the growth of a new wave of discount brokers, including E*Trade and TD Ameritrade. Now for the next challenger.
#stocks: Three Months. Three Mistakes – Slope of Hope – A Trading Blog
Slope has, over its nearly eleven year history, garnered a reputation for honesty. I make every effort to be completely forthcoming with my thoughts about trading, even when it’s going lousy for me, as it has over the past four weeks. I think this is more helpful than trying to “spin” things as many other analysts do, making it seem like they’ve never made a single misstep. This is going to be one of those “dangerously honest” posts, because 2016 has been a disappointment to me so far, even though it needn’t have been so.
#general: The Millionaire, the Guru, and the Lessons for the Rest of Us
Bengaluru’s two well-known sons are getting better known by the day. While Vijay Mallya is laughing all the way from the bank, Sri Sri Ravishankar is laughing on the bank (of the Yamuna). I am leaving, said Mallya, and left. I shall remain, said Ravishankar, and remained at the environmentally sensitive site in Delhi. If you pull off something large enough and stunning enough, you can call the shots.
#general: Mekka as Most Promising Hotel Investment Market
It is no coincidence that the most profitable hotels on the planet are located in Makkah, the holiest city of Islam as the site of the Grand Mosque and the Kaaba. For fifteen centuries, Muslims have travelled to Makkah from all over the world for the Hajj and Umrah pilgrimages, making the city the highest source of inbound foreign visitors in Saudi Arabia. Makkah is arguably the most attractive hotel investment opportunity available in the Middle East.
#macronomics: Lost and Found; four Million Tonnes of Aluminium: Andy Home
Global aluminium production fell by 1.6 percent in January. It doesn’t sound like much but it was the first year-on-year decline since October 2009. Good news for a market that has for years been struggling with chronic over-production and low prices. Even better news that production in China also fell for the second consecutive month with the year-on-year decline accelerating to 4.5 percent.
#general: Black money: DRI Probing Illicit Outflow of $505 Billion during UPA rule
The Directorate of Revenue Intelligence (DRI) has started a probe to verify whether $505 billion was siphoned out of the country illegally during 2004-13, when Congress-led UPA was in power. The probe comes after a direction from Supreme Court-appointed Special Investigation Team (SIT) in this regard.
#macronomics: Did The Long-Term Trends Flip This Week?
#general: Six Mistakes of TinyOwl, the Blue-eyed Start-up Child
TinyOwl, a Mumbai-based food technology start-up, is staring down the barrel of a gun. The numbers tell the dismal story. Burning through Rs 2.5 crore a month on an average, it was only left with Rs 18 crore at the end of January. In the past 18-odd months, it had raised Rs 152 crore from various marquee investors and has now run out of options. No investor is keen on funding the company, and no one wants to buy it. So, it has until June for its final hurrah – unless it can get funding or sell.
But how did the blue-eyed child of the start-up ecosystem get here?
#macronomics: Iran Set to Join Oil Freeze Talks after Output at 4 mbpd: ISNA
Oil Minister Bijan Z
anganeh said Iran would join discussions between other producers about a possible freeze of oil production after its own output reached four million barrels per day (bpd),Iran’s ISNA news agency reported on Sunday.
#general: Car Exports from India Decline Nearly 4% in Apr-Feb Period
Passenger car shipments from India declined 3.71 per cent to 4,84,602 units in April-February period of this fiscal due to challenges in top export markets like Algeria, Europe and neighbouring countries. Car makers had shipped 5,03,292 units in the same period of the previous fiscal.
#general: Mumbai’s Mallyas: Directors of a Firm Dupe 10 Banks for Rs 2,555 cr.
Directors of Varun Industries, Kiran Mehta and Kailash Agarwal, are on the run after duping 10 banks to the tune of Rs 2,555 crore; their office in Byculla and residential properties have been sealed and will be auctioned off
In yet another case of wilful default, a consortium of 10 banks — with Indian Bank as the lead bank— is on the lookout for two missing directors of a firm called Varun Industries for duping it to the tune of Rs 2,555.56 crore.
#stocks: HDFC Bank has no Love for India: Consumer Court
HDFC Bank “has got no love and respect for India” as it put the country’s reputation at stake by not activating a debit card of a couple “trapped in a foreign country”, the apex consumer court has said.
#general: Is Parliament’s Questions System Broken? — Here’s How to Fix it!
7.5% of Lok Sabha MPs are credited for asking 50% of starred questions and 13% of MPs are credited for 80% of all questions!
Since June 2015 I have been working as a Legislative Assistant in the office of Mr. PD Rai, the Lok Sabha MP from Sikkim. It has been a really interesting experience and the work is diverse and engaging. The only component of my work that I’ve always been critical of is preparing parliamentary questions.
#macronomics: Growth Prospects Are Receding Again: Working Age Populations Are Shrinking
The world is not producing enough babies to get growth rates up to their post-World War II levels of 3.5 percent on an average. This could fall to 2.5 percent.
Even if India still remains the fastest growing economy for a reasonable period of time, it will not be because we are doing well, but because China is doing worse, and headed downhill. Case for schadenfreude, not celebration. We are entering uncharted territory. It is quite possible that a century of high-growth global economy is coming to a close.
#general: Flipkart clicks Alibaba but may get less value
India’s largest e-commerce marketplace, Flipkart, is in talks with Alibaba to raise $1 billion (Rs 6,700 crore at Friday’s exchange rate) but the Chinese e-commerce firm (Alibaba) is looking at investing at a lower valuation in a tighter funding market. This means Alibaba is willing to pay a lesser amount per share as against what other investors paid in the last round of funding in July 2015.
#general: Hotels check out of Oyo, Zo after Unhappy Stay
What hotelier Sunil J Trivedi didn’t realise about signing up with an aggregator was this: It could seriously lower the tone of an otherwise virtuous establishment. And all because of discounts.
“Undercutting is totally not tolerable in this industry as it is harmful for our business and goodwill. This clearly impacted the customers coming to us as sometimes we got dayuse kind of bookings, which we never take,” said Trivedi, general manager of Riverview Hotel, a three-star hotel in Ahmedabad.
#stocks: Make Me a Trader – South Africa – Documentary
In November 2015 eight novice traders from around the world joined Institute Managing Partner Anton Kreil and Senior Trading Mentor Gregoire Dupont in Capetown South Africa for an educational vacation of a lifetime. Here we provide a glimpse into the first ten days of an Institute Three Month Trader Mentoring Programme with Anton Kreil and Gregoire Dupont.
#macronomics: Govt Seeks Parliament’s Approval for Gross Additional Expenditure of over Rs 1.12 lakh cr
Government on Friday sought Parliament’s approval for gross additional expenditure of over Rs 1.12 lakh crore as part of the third and final batch of Supplementary Demands for Grants for this fiscal, a bulk of which is for increasing India’s quota in IMF.
#general: What’s Wrong with Food Tech?
This conversation is off the record. Yes. Off the record.
It means the person talking here doesn’t want to be named because he doesn’t want to fall foul of the company he works for—a start-up, where he is part of the top management—where a good amount of investor dollars are riding on him and his team. There’s more to his request for anonymity. Food tech has had it pretty rough the last few months—what with several start-ups shutting shop, others scaling down and a few others rethinking whether there’s money to be made in doing whatever that they do. So, with everything that’s happened, nobody wants to indulge in schadenfreude on what’s going on.
#macronomics: Trump Presidency Rated Among top 10 Global Risks: EIU
Donald Trump winning the US presidency is considered one of the top 10 risks facing the world, according to the Economist Intelligence Unit.
The research firm warns he could disrupt the global economy and heighten political and security risks in the US.
#macronomics: Impaled On Its Own Petard——The Fed’s Folly Festers Further
Listening to even a small portion of Simple Janet’s incoherent babble makes very clear that the nation’s central bank is well and truly impaled on its own petard. According to the dictionary, the latter term refers to…..
…….. a small bomb used for blowing up gates and walls when breaching fortifications. It is of French origin and dates back to the 16th century. A typicalpetard was a conical or rectangular metal device containing 2–3 kg (5 or 6 pounds) of gunpowder, with a slow match for a fuse.
Maybe that’s what they have been doing all along—–that is, waiting for their slow match monetary fuse to finally ignite the next financial conflagration.
#g
eneral: AirAsia Berhad CEO Tony Fernandes Applies for ‘Overseas Citizen of India’ Status
AirAsia’s Tony Fernandes has applied to become an ‘overseas citizen of India’ amidst charges that he and his airline have been flouting norms relating to foreign ownership and control.
#stocks: Govt’s Red Signal for new Two-wheeler Models in Delhi
Rajiv Bajaj, managing director of Bajaj Auto, the country’s third largest two-wheeler maker chose Delhi to unveil his company’s new motorcycle V15 last month. Ironically, the bike cannot be sold in New Delhi because the transport authorities have not given their approval. The Delhi transport department is not permitting registration of new models of two-wheelers that comply with Bharat Stage (BS) III emission norms, affecting companies like Bajaj Auto, Royal Enfield and Suzuki.
#general: 5,275 Wilful Defaulters (+ Mallya) Owe Banks Rs 56,621 Crore
Liquor baron Vijay Mallya (60) and his Rs 7,000-crore default occupy headlines, but there are 5,275 other “wilful defaulters”—together, they owe India’s banks Rs 56,521 crore ($8.56 billion), according to the Credit Information Bureau (India) Ltd, or CIBIL, a company set up by banks to collect defaulter information.
#general: Presumptive Taxation Attractive for Mid-size Professionals
One of the key proposals in this Budget has been the introduction of a presumptive taxation scheme for professionals. This had been one of the recommendations of the Justice Easwar Committee, which has been accepted, though in a modified form. A similar presumptive scheme has been in existence for many years for small businesses. How does the new scheme work, and how would it impact professionals?
#general: Google car Crash ‘Not a Surprise’ – US Transport Secretary
The recent crash involving a Google self-driving car and a bus was “not a surprise”, the US transport secretary has said. Anthony Foxx told the BBC that accidents were inevitable, but that the emerging technology should not be compared “against perfection”.
Nobody was hurt in the crash, but it was the first time Google’s on-board computer has been blamed for causing a collision. Secretary Foxx was attending the South by Southwest Interactive festival in Austin, Texas.
#stocks: List of Top 50 Corporate Loan Defaulters – Published by the All India Bank Employees Union (AIBEA)
All India Bank Employees Union (AIBEA), one of the biggest employees unions in India has decided to publish the list of top 50 corporate defaulters in this country. Bank union, AIBEA, also demands that banks recover bad loans from these willful defaulters.
#general: Man in Manila Gets $30 million Cash from Cyber Heist; Bangladesh Central bank Governor Quits
Bangladesh’s central bank governor resigned on Tuesday over the theft of $81 million from the bank’s U.S. account, as details emerged in the Philippines that $30 million of the money was delivered in cash to a casino junket operator in Manila.
The rest of the money hackers stole from the Bangladesh Bank’s account at the New York Federal Reserve, one of the largest cyber heists in history, went to two casinos, officials told a Philippines Senate hearing into the scandal.
#macronomics: Problems with Bank of China Accounts and Foreigners (particularly Americans)? – a Reddit Thread
This is the first glimmer of FATCA (Foreign Account Tax Compliance Act) appearing at Chinese banks, logical that it would start of Bank of China.
FATCA, you know, that amazing piece of US legislation that requires ALL foreign banks EVERYWHERE in the world to report to the IRS and US Treasury Department on the financial particulars of ALL account holders who are US citizens. Insanely stupid of course, but banks that don’t comply can’t interact with the US banking system (which means they instantly go out of business).
#general: New app Udrive Means you may Never have to Catch a Taxi Again
Sick of taking taxis but don’t want to have to buy a car? Well Udrive could be your answer… There’s a new company in town called udrive that’s offering pay-per-minute cars that can be driven around Dubai at a cost of just 50 fils per minute, and then parked for free.
How does it work? Well you download an app, pay a Dhs20 monthly membership fee and then book cars near you via the app. You can then open the cars with your phone (ah, technology). Once in the car you’ll find the key in the glove box, after you ‘unlock’ the key with a pin code sent to your app, the charge of 50 fils per minute starts. The charge stops when you’ve parked and the key is locked up again.
#general: The Middle Class Delusion: Why Young Indians need a Reality Check
When the recent brouhaha erupted over taxing the EPF (Employee Provident Fund), even the staunchest supporters of the NDA government questioned the rationale of such a move, so much so, that Finance Minister Arun Jaitely had to junk the idea.
One of the most often repeated arguments I heard on social media and people around me is — “We are amongst the 2–3 % who pay taxes, why do you have to hit the middle class where it hurts the most.”
#general: Doing a TED Talk: The Full Story
You’ve probably heard this Seinfeld joke:
According to most studies, people’s number one fear is public speaking. Number two is death. Death is number two. Does that sound right? This means to the average person, if you go to a funeral, you’re better off in the casket than doing the eulogy.
Knowing humans, this shouldn’t be that surprising. I’ve mentioned before that we all have this problem where we’re weirdly obsessed with what other people think of us, so it makes sense that public speaking should be our collective phobia.
#macronomics: India ‘Not Scared’ if Monsanto Leaves, as GM Cotton row Escalates
US seed company MonsantoBSE -2.16 % is welcome to leave India if it does not want to lower prices of genetically modified cotton seeds as directed by the government, a minister said on Wednesday, in a sign the rift between New Delhi and the firm is widening.
#general: Historic Moment For Gaming In India, As Nagaland Legislative Assembly Passes Online Games of Skill Bill
In a breaking news report, Nagaland legislative assembly has just passed its online bill – the “Nagaland Prohibition of Gambl
ing and Promotion and Regulation of Online Games of Skill Bill, 2015.”
The bill was approved yesterday by the select committee with hardly any changes, after they found all its clauses satisfactory. According to Glaws.in, the state’s Morung Express reported, “The recommendation of the Committee stated that it has thoroughly examined the Bill and deliberated on its social and legal implications and it is satisfied with the legalities and the revenue that would be generated.”
#general: Lenders in Tight Spot over Winsome’s Default; Banks Want to Shame Company’s Directors
In the summer of 2013, Winsome Group, an almost forgotten name now, had rattled the Indian bullion and diamond markets after it defaulted with 14 banks. Low-profile and less flashy than Vijay Mallya, two Winsome Group companies left a hole of Rs 6,800 crore in the books of local lenders — making the diamond house the country’s second-largest wilful defaulter after Kingfisher Airlines.
#stocks: Differences over Rs 2200 cr Valuation: ICICI Securites, Kotak Withdraw from Infibeam IPO
Two investment banks — ICICI Securities and Kotak Mahindra Capital — dropped out from the Rs 450-crore initial public equity offering (IPO) of Infibeam, an internet and e-commerce company. Disagreement over valuations was the reason, said three people with knowledge of the development.
But Infibeam said the decision was due to the small size of the offering.
#general: Now Invest in Government Bonds Through ATMs
This unique facility will provide easy access to retail investors to invest in government securities.
Retail investors can now invest in government securities through ATMs, IDBI Bank said on Wednesday while announcing the launch of its G-Sec Investment Facility.
The bank in a statement said that it has “inaugurated the nation’s first of its kind ‘G-Sec Investment Facility through ATM for Retail Investors’ on March 15″.
#stocks: Blackstone Set to Acquire IT co Mphasis in $1 billion deal
The world’s largest private equity investor Blackstone Group is close to acquiring IT firm Mphasis in an over $1-billion deal, outbidding two other strong contenders — Apollo Global Management and Tech Mahindra. It will buy out Hewlett-Packard’s (HP’s) 60.5% stake in the Bengaluru-based IT firm.
#general: FDA warns India’s Emcure Pharma, Cites Repeated Data Fudging at plant
The U.S. Food and Drug Administration (FDA) has warned Indian generic drugmaker Emcure Pharmaceuticals, saying it repeatedly fudged test records at its plant at Hinjwadi, Pune, in another case of a pharmaceutical firm in the country facing such action.
#macronomics: [Chart Of The Week] Why The U.S. Will Continue To Underperform Emerging Markets
One of the best ways to be positioned over the past 2 months has been to be in Emerging Markets, not in U.S. Stocks. I’ve been pounding the table on this trade since January and it has really worked out in our favor. The big question today is: Now What? Does this thing keep going, or does the longer-term trend of the U.S. outperforming Emerging Markets resume in the second quarter?
#general: NLRB Opens Case Against McDonald’s
Last week, the National Labor Relations Board (NLRB) opened its case against McDonald’s in court, claiming the quick-serve giant is liable for the actions of franchisees as a joint employer.
But the trial is not just about McDonald’s.
#stocks: New 2017 Suzuki Swift Pictures Leaked
Photos of the next-gen 2017 Suzuki Swift hatchback have surfaced on the internet. These images were first shown to select audience at a dealer conference organised by the manufacturer, and gives a fair of idea of the next-gen car’s interiors as well as exteriors.
#macronomics: Rice Is Out, Beans Are in as Thailand’s Farmers Return to School
Rice farmer Prapatpon Rungsatien perches on a plastic chair in a classroom in rural Thailand. Ceiling fans stir the humid air as she and 49 of her neighbors hunker down for a talk on Southeast Asian economics.
#general: Mukesh’s $20 billion Bet on TV, Telecoms may Rekindle Rivalry with Anil
Mukesh’s television unit has been aggressively wrapping up deals with hundreds of small players in a street-by-street effort to conquer that final hurdle in its cable TV drive.
India’s richest man, Mukesh Ambani, is muscling into the cable TV sector as part of a media and telecoms offensive that pits him against his once-estranged younger brother andthreatens to shake up both industries.
#stocks: Lupin Struggles after US FDA’s 9 Observations on Goa plant
(Lupin, FDA Struggles, Goa Plant)
#general: Why a Corporate Bond Market Would have Disciplined Vijay Mallya
It is unlikely that finance minister Arun Jaitley was even thinking about Vijay Mallya when he argued in his budget speech that India needs a vibrant corporate bond market. But it is worth asking whether matters would have been allowed to fester for so long if Mallya had beenborrowing money from a corporate bond market rather than banks.
#stocks: Ajay Singh Bought SpiceJet for Rs 2, ex-Owner Maran says inPplea
Ajay Singh paid Rs 2 to Kalanithi Maran to acquire the latter’s controlling stake in SpiceJet. This was disclosed by Maran in his Delhi High court petition against SpiceJet and its current promoter Singh over a share transfer dispute.
#macronomics: Is the Rupee Close to its Goldilocks Rate? Yes, Suggests Raghuram Rajan
Is the Indian rupee overvalued? Or is it undervalued? Reserve Bank of India (RBI) governor Raghuram Rajan’s recent remarks suggest that it may be neither and that the Indian currency may be moving in a band close to what he terms as “the Goldilocks rate”.
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.
Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.
