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:
#macronomics: We’re in a Bunny Market
Since the end of 2014 there has been plenty of movement in the stock market but the S&P 500 hasn’t really gone anywhere. These periods can be very frustrating for investors because most people tend to think in terms of being bullish or bearish. They’re constantly looking for the end of the bull market or the resumption of the uptrend that started in 2009. A market that goes nowhere basically leaves no one happy.
#stocks: Why Maruti Suzuki’s Shares Hit A Roadblock
Since January, Maruti Suzuki India Ltd’s stock has fallen by 19%, much sharper than the 3% fall in the BSE Sensex and the 3.8% drop in the BSE auto index. What made this outperformer and darling of the bourses fall from grace? That, too, at a time when the firm’s car sales are growing at a faster pace than its peers and it is steadily chipping away at their market share?
#stocks: PVR Shares Gain On Launch Of Superplex
PVR Ltd share price climbed over 2 per cent intraday on Monday after the multiplex major on Sunday launched Superplex, a premium concept that will house 15 movie screens in one multiplex. According to reports, PVR is also looking to double its screen count in the next three years to reach 1,000 screens. The company has 516 screens under its belt.
#general: VW, Porsche Recalling 800,000 SUVs Over Possible Pedal Issue
Volkswagen and its Porsche unit say they’re recalling a total of about 800,000 Touareg and Cayenne SUVs worldwide because of a potential problem with the pedal system.
#stocks: Natco Pharma Issues Update on FDA Inspection
Natco Pharma Limited (NSE: NATCOPHARM; BSE: 524816) updated that an inspection was conducted by the United States Food & Drug Administration (USFDA) in two of its manufacturing facilities recentlythe Active Pharmaceutical Ingredients (API) manufacturing facility at Manali, near Chennai, and the Pharmaceutical Formulations facility at Kothur, near Hyderabad, during early February and March, 2016, respectively.
#stocks: Lupin Tanks 6%; Issues Clarification On US FDA Audit At Mandideep Facilities
Lupin has clarified that there is speculation about a US FDA audit at our Mandideep facilities. We had an audit at our Mandideep location from 2nd Feb, 2016 to 19th Feb, 2016. There were total 3 observations. As the site has both dosage form facility and API facility, 2 separate form 483s were issued with 2 observations each.
#general: Chinese Steelmaker Defaults On HK$1 Billion Debt Just Days After ‘Chairman Commits Suicide’
A steel group in northern China failed on Monday to repay 852 million yuan (HK$1 billion) in corporate debt, just days after its chairman was found dead in an apparent suicide.
A bigger default is expected from Dongbei Special Steel Group, as corporate leverage ratios rise sharply and Chinese industry battles persistent slowing growth.
#stocks: Tata’s U.K. Exit Faces Pensions Pothole
Tata’s decision to put its U.K. steel assets up for sale means the rather dull subject of pensions is set to become a red-hot issue for Europe’s steel industry. How so?As if weak European steel demand and China’s rampant steel exports weren’t enough of a problem for the sector, the low interest-rate environment has made funding workers’ retirements much more costly.Steelmakers have large legacy workforces so are among those worst affected.
#stocks: M&M acquires 35% in Finland’s Sampo Rosenlew
Mahindra and Mahindra (M&M) has acquired 35% stake in Finland’s Sampo Rosenlew for up to 18 million euros (about Rs 135 crore), marking its foray into the combine harvester business. The deal is expected to close by June 30, 2016.
#stocks: Diis Apply To RBI To Acquire Over 5% Stake In Equitas IPO
The initial public offering (IPO) of small finance bank licensee Equitas Holdings Ltd is witnessing strong demand from major domestic institutional investors (DIIs).
According to several people aware of the development, around four to five DIIs have applied to the Reserve Bank of India (RBI) for the central bank’s permission to acquire more than 5% stake in the IPO.
#stocks: VLS Finance @ Just Rs 36 Because Of a Colourful Past !~Relax It Has Relaxo Footwears! – A Blog
Promoted way back in 1986 by the Mehrotra Family of Delhi, VLS Finance @ Rs 36 (Rs 10) has had a very colourful past !
A candid conversation which I had with one of India’s top Bureaucrats based in New Delhi, since deceased, in the 1990′s was peppered with really aggressive and loud colourful language by him when it came to the VLS Group and it’s Promoters.
#stocks: Maruti’s Operating Margins To Come Under Pressure
Shares of Maruti Suzuki have been hammered by investors of late. The stock has fallen 21 per cent over the past three months due to rising concerns over capacity crunch and lower margins. The delay in the Gujarat plant will impact the company’s ability to meet new demand in the new financial year (FY17). The sharp fall in operating margin in the December 2015 quarter also impacted the stock’s performance. Sequentially, Maruti’s operating margin fell 190 basis points (bps) to 14.4 per cent. The Street now expects margins to deteriorate further.
#general: SIT To Monitor Probe In Over Rs. 1,000 Crore Rice Export Scam
The Supreme Court-appointed Special Investigation Team (SIT) on black money will monitor the probe into the alleged over Rs. 1,000-crore scam in export of high-quality Basmati rice to Iran which was fraudulently diverted mid-sea to Dubai.
The Directorate of Revenue Intelligence (DRI), which has unearthed the scam, has shared relevant details of the case with the SIT, which will monitor the agency’s probe, official sources said.
#general: Relianc
e Jio’s Complete Roll-Out Of 4G Services Only By December: UBS
Amid speculation over the actual date of the roll-out of Reliance Jio 4G telecom services, a top global financial services firm, UBS, said while soft launch was expected by the end of this month, the full commercial offering was expected by December.
“Contrary to market belief that Jio has started rolling out 4G SIMs commercially, our channel checks in Mumbai and Delhi suggest that although SIMs have been shipped to the retail outlets, they are not yet available for sale,” the consultancy said in a report.
#stocks: Ajanta Pharma: A Dose Of Strong Medicine
The Agrawal brothers of Ajanta Pharma — Yogesh and Rajesh — travelled to at least 100 countries and scoured India to learn the ropes of the speciality pharmaceutical market when they joined their ailing family business almost 15 years ago. Saddled with huge debt and declining growth, they were tasked with doing something urgently to save the business and also with learning what not to do.
#stocks: Hinduja Leyland Finance, CL Educate file for IPO
Hinduja Leyland Finance Ltd (HLF), the commercial vehicle financing unit of Ashok Leyland Ltd, on Wednesday filed its draft initial public offering (IPO) documents with the Securities and Exchange Board of India (Sebi).
#macronomics: India’s February Core Industrial Growth Highest In 13 Months
Eight core industries that account for about 38 percent of India’s industrial output rose 5.7 percent in February, driven predominantly by fertilizer, cement and electricity sectors, according to a statement issued by the Indian commerce & industry ministry Thursday. The growth in the eight core industries is the highest in at least 13 months, according to Reuters.
Crude oil and natural gas production continued to lag, while refinery production almost doubled to 8.1 percent on a year-on-year basis.
Fertilizer production rose 16.3 percent during the month over February 2015, while cement production increased 13.5 percent when compared to the year-ago period, the statement said.
#stocks: Are Infosys Founders Not Happy With Vishal Sikka?
The promoters (and co-founders) of Infosys Ltd do not seem overly happy with the decision of the company’s board to grant a two-year extension till 2021 to chief executive Vishal Sikka.
He was appointed CEO in 2014 for a five-year term.
#macronomics: PM Markets: Sugar Extends Rally To 17-Month High
Raw sugar futures surged to a 17-month high on Tuesday, helped by a rallying Brazilian currency and some wet weather headed for the country’s cane belt, in a market that is starting to get twitchy over the pending supply deficit.
Nick Penney, senior trader at Sucden Financial, noted that weather reports from Brazil’s key Centre South cane belt were pointing to rainy weather to come, which could delay cane cutting.
#stocks: FII’s One Rupee, Creates / Vanishes Rupees 60 From Indian Stock Market
• FII’s One Rupee, creates / vanishes Rupees 60 from Indian stock Market. This is the power of FII’s money. (See Table 1)
• Nifty may move by up 10% if FII’s invest around Rs 13,000 crores in a month and vice-versa.
• Though, till now in Mar-16 month, FII’s invested only Rs 7,700 crores and Nifty is up by 10%.
#stocks: Mahindra Reveals Name Of Its New SUV As ‘Nuvosport’; Launch On April 4
Indian utility vehicle manufacturer Mahindra & Mahindra has revealed the name of its new SUV as ‘NuvoSport’. To be launched on April 4, 2016, the company also unveiled the images of the NuvoSport.
Based on the same new generation platform as the Scorpio, the NuvoSport derives its name from its sporty styling and its innate ability to enable an active lifestyle. The SUV is targeted at those who lead an active, outdoorsy lifestyle and have a bucket list of experiences to tick off regularly during their lifetime.
#general: U.K. Extends Drinking Hours to Mark Queen’s 90th Birthday
The U.K. will allow pubs and bars to stay open later than usual on June 10 and June 11 to mark the 90th birthday of Queen Elizabeth II, Prime Minister David Cameron said.
Speaking at his weekly question-and-answer session in the House of Commons in London on Wednesday, Cameron said opening hours would be extended for the weekend, which will see a range of events to celebrate the head of state’s “official” birthday.
#stocks: Starboard to Start Proxy Fight to Remove Yahoo’s Board
Hedge fund Starboard Value LP is seeking to remove the entire board of Yahoo Inc., setting the stage for a battle over the future of the faded Web giant.
#general: Ambit Seeks to Raise $150 Million for India-Focused Hedge Fund
Ambit Investment Advisors, a Mumbai-based joint-venture with Nikko Asset Management, is seeking to raise $150 million by the middle of next year for an India-focused hedge fund, as the industry opens up to foreign investors.
#general: Brussels Attacks: How Saudi Arabia’s Influence And A Deal To Get Oil Contracts Sowed Seeds Of Radicalism In Belgium
There are many reasons why Belgium has become a hotbed of radical Islamism. Some of the answers may lie in the implanting of Saudi Salafist preachers in the country from the 1960s.
Keen to secure oil contracts, Belgium’s King Baudouin made an offer to Saudi King Faisal, who had visited Brussels in 1967: Belgium would set up a mosque in the capital, and hire Gulf-trained clerics.
#stocks: Why Indian Banks Face A Serious Crisis
If the RBI had made a one per cent rate cut back in November 2014 when inflation risks had moderated, banks would have made approximately Rs 50,000 crore of treasury profits, says Janmejaya Sinha. The attempt by the Reserve Bank of India (RBI) to clean up bank credit portfolios in one financial year has made this one of the worst quarters in Indian banking.
#general: Taxing Times For Kingfisher Airlines Staff Continue
Shock and helplessness was writ on Sanjay Bahadu
r’s face, a former employee of the now-defunct Kingfisher Airlines, when he received intimation from the Income Tax (I-T) department, asking for taxes of about Rs 34 lakh on the income he had earned between 2009 and 2012.
#general: Kejriwal Named Among World’s 50 Greatest Leaders By Fortune
Arvind Kejriwal has been named among the world’s 50 greatest leaders by Fortune magazine with the Delhi Chief Minister being the sole Indian leader on the list topped by Amazon CEO Jeff Bezos.
#macronomics: Why Is The IMF Afraid Of Questioning India’s GDP Numbers?
Indian economy
• India is the fastest growing economy while China is losing steam
• India is projected to grow at 7.6% in 2015-16
The data
• Indian exports have fallen for 15 months straight
• Index for industrial production has shrunk for 3 months in a row
• January contraction stood at -1.5%
#general: On Paper, Electrified Villages — In Reality, Darkness
The Centre claims to be fulfilling the Prime Minister’s plan for full rural electrification. But a close check of its own real-time data shows that the gap between official claims and ground reality is stark
Haldu Khata, a village in Bijnor district of Uttar Pradesh, is one of the 7,008 villages that the government claims to have “electrified” in the last year, under the Modi government’s flagship scheme of rural electrification, Deendayal Upadhyaya Gram Jyoti Yojana.
#general: Under Modi, India May Be Generating Less Black Money Than Before
Given the escalation in the hunt for illegal wealth abroad, both by the Modi government and the Supreme Court-appointed Special Investigation Team (SIT), it is unlikely that more black money is being shipped abroad.
#stocks: Valeant: Blame Our Accounting, Please!
To anyone who thinks the trouble at Valeant Pharmaceuticals arises primarily because $58 million in revenue was booked in the wrong quarter, there’s an array of attractive bridgesavailable for your inspection and purchase.
#stocks: Rs 4,000-Crore Investments In Wind Energy On Brink Of Becoming Npas
Investment of Rs 4,000 crore in wind energy projects is on the verge of becoming non-performing assets, as over 550 MW of projects that are ready to generate electricity are stranded because a state utility has refused to sign power purchase agreements (PPA) or issue commissioning certificates.
#macronomics: Indian Paradox: As Economy Soars Modi Reforms Face Big Headwinds
When Indian Prime Minister Narendra Modi swept into power in 2014, he did so with an ambitious mandate to reboot the economy, stamp out corruption and lure foreign investment by streamlining the country’s convoluted regulatory regime.
#stocks: Hottest Emerging Market for Algo Trades Wants to Cool Down
India’s flash boys are discovering that even the biggest emerging market for computerized trades has its limits.
In just five years, high-speed and algorithmic traders have gone from bit players to a dominant force on Indian exchanges, enabled by a technological arms race between the nation’s top exchanges that cut transaction times to tiny fractions of a second. Now, as some of the country’s largest brokerages call for tighter regulation, those same bourses are starting to explore whether speed traders should be reined in.
#general: Uber Profits Elsewhere Support ‘Sustainable’ Spending In China: CEO
Ride hailing app company Uber Technologies Inc [UBER.UL] is generating more than $1 billion in profit a year in its top 30 cities globally, and partly using that money to bankroll its expansion in China, Chief Executive Travis Kalanick said in an interview.
#general: Sudden Spurt In Health And Wellness Industry In Koramangala
When life-style related diseases are tightening its grip, Koramangla, a startup-hub where young leaders are betting for their best, is witnessing a sudden spurt in health and fitness industry, as the youth here are increasingly prioritising there fitmess. And their effort is not without any understanding. Ashmantak, a techie living in Koramangala says that he came across reports of increasing non-communicable disease in India and its reason.
#macronomics: Is India Facing Its Worst-Ever Water Crisis?
On 11 March, panic struck engineers at a giant power station on the banks of the Ganges river in West Bengal state.
Readings showed that the water level in the canal connecting the river to the plant was going down rapidly. Water is used to produce steam to run the turbines and for cooling vital equipment of coal-fired power stations.
#general: Angola’s Wikipedia Pirates Are Exposing the Problems With Digital Colonialism
Wikimedia and Facebook have given Angolans free access to their websites, but not to the rest of the internet. So, naturally, Angolans have started hiding pirated movies and music in Wikipedia articles and linking to them on closed Facebook groups, creating a totally free and clandestine file sharing network in a country where mobile internet data is extremely expensive.
#general: EPFO To Give Interest On Inoperative Accounts From April 1
The central board of trustees of the Employees’ Provident Fund Organisation has decided to give benefit of accrual of interest on the inoperative accounts, reversing the decision taken in2011 by the then UPA-II government.
#general: Finland Schools: Subjects Scrapped And Replaced With ‘Topics’ As Country Reforms Its Education System
For years, Finland has been the by-word for a successful education system, perched at the top of international league tables for literacy and numeracy.
Only far eastern countries such as Singapore and China outperform the Nordic nation in the influential Programme for International Student Assessment (PISA) rankings. Politicians and education experts from around the world – including the UK – have made pilgrimages to Helsinki in the hope of identifying and replicating the secret of its success.
#general: Vodafone Moves I
nternational Court of Justice Over India Tax Arbitration: Report
British telecom giant Vodafone is believed to have moved the Hague-based International Court of Justice (ICJ) seeking appointment of a judge to preside over arbitration in its Rs 14,200-crore tax case.
#general: The Time and Place for ‘Helicopter Money’
With fiscal and monetary policy reaching their limits, the search for new solutions to the world’s low-growth, low inflation rut has turned to “helicopter money.”
The policy gets its name from an essay by Milton Friedman in 1969 that imagined newly printed money dropped from helicopters. While it evokes images of Weimar Germany and hyperinflation, it’s actually not that exotic or, for the U.S., unprecedented.
#goodreads:
Havells: The Untold Story of Qimat Rai Gupta
The story of a man who began his journey with Rs 10,000 and built a Rs 17,000-crore empire
From beginning his career as a small trader in Delhi to building Havells, one of India’s largest electrical goods company, Qimat Rai Gupta’s story makes for an inspiring read. Told rivetingly by his son, Anil Rai Gupta, this is the account of how QRG, as he was fondly known, braved poverty, ill health, competition, corruption and bureaucracy to turn his dreams into reality.
#backtobasics
Better System Trader – A Chat with Laurent Bernut: Part 2
Bezos Prime – By Adam Lashinsky
Uber’s plan to get more people into fewer cars – Travis Kalanick at TEDTalks
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.
