At Capitalmind Premium, we have a very active Slack channel where we discuss a lot of interesting topics. In there, a number of interesting links come our way. Here’s a list:
- The US has grown so much as a oil producer that now OPEC has nightmares about them. In fact, OPEC has created this mess. Back in 2014 when it was flooded the market with oil and caused a crash in oil prices, American companies had to lean out to survive the crash. However, they increased drilling as the prices started rising eventually. It will be interesting to see how OPEC crawls out of this problem.
https://www.bloomberg.com/news/articles/2018-11-21/opec-s-worst-nightmare-the-permian-is-about-to-pump-a-lot-more - London Metal Exchange is in talk with Indian companies to set up warehouses in the country as LME wants to phase towards physical settlement of all commodity derivatives. So that means that we will not need to settle out deliverable contracts on their prices. When physical delivery becomes mandatory, they are settled in local prices with additional taxes and freight and warehouse charges.
https://www.bloombergquint.com/business/london-metal-exchange-is-changing-how-it-does-business-in-india#gs.TMrLT4A - So it seems the next recession is around the corner for Australia. Despite having created millions of jobs and sailing at an economic growth rate of 3.1 percent (most of which are from exports of mining commodities), there is a problem. Consumer spending has reduced drastically. This is concerning considering 60 percent of the economic growth comes from household spending. What’s even more scary is that the household debt is on a high. The reason this is scary is because interest prices are rising and property prices are plummeting. Add to this a low income growth and you have all the makings of a horror movie.
https://www.abc.net.au/news/2018-06-07/next-recession-already-in-view-says-economist/9842596 - Imagine a huge area of wilderness and another huge area of civilization. Would you risk having a crude oil spill around these areas? Canada has been at risk of this. Their dependence on railways to transport oil is becoming a serious cause of worry. While the alternatives are pipelines, boats and trucks, each of these mode of transportation carries one or the other form of risk. The challenge is to figure out which is least prone to disaster. This may not be all that easy after all.
https://www.forbes.com/sites/jamesconca/2018/10/11/which-is-safer-for-transporting-crude-oil-rail-truck-pipeline-or-boat/#519064c7b237 - India is not learning from a really really good crisis – the bond crash. This very popular article tells you less about IL&FS and more about Yes Bank – about how one promoter company (run by the Rana Kapoor family) has issued bonds against their shareholding in Yes bank. (And strangely that holding isn’t actually marked as pledged). And then, mutual funds have bought these bonds, causing some commentary of a quid-pro-quo.
https://www.bloomberg.com/opinion/articles/2018-11-25/lessons-from-il-fs-group-bankruptcy-go-unheeded-in-india - Upfront commission recently got disallowed for mutual fund houses. SEBI is now considering doing the same for PMS and AIF products. If this goes through, the break-even for the asset managers who run these products will be come longer. (Note: Capitalmind Wealth has no entry or exit loads)
https://www.livemint.com/Home-Page/heTPEzs3e6Yl3iULqnRYRI/After-mutual-funds-will-upfront-cost-on-PMS-and-AIFs-go-too.html - A month after the sale of DHFL bonds by DSP mutual funds, SEBI has initiated an inquiry into it. Additionally the finance ministry is also closely monitoring the the case. DSP said that any speculation that they sold the bonds due to redemption pressures are completely untrue.
https://www.livemint.com/Money/LV09uZKEeNuj59oHjuU7CI/Sebi-begins-probe-into-DSP-Mutual-Funds-sale-of-DHFL-bonds.html - So far Bharti Airtel was the telecom partner for the Indian Railways… for 6 years. Now, from January 1, Reliance Jio will be serving as their telecom partner. This, apparently, will reduce the telephone bill of the Government body by 35 percent.
https://www.livemint.com/Industry/dQXqjTPgfWvFtPLpHsT7UL/Reliance-Jio-to-take-over-as-service-provider-for-Railways-f.html - The Income Tax department has sold 40 percent of Cairn Energy Plc’s shares in Vedanta to recover part of the Rs. 10,247 crore pending tax from the latter.
https://economictimes.indiatimes.com/markets/stocks/news/cairn-says-indian-tax-office-sold-216-million-of-vedanta-shares/articleshow/64914339.cms - Not many top leaders admit a mistake in doing business. Rajiv Bajaj did. He claimed that the 100cc Discover was a huge mistake and it’s the reason that they are still in the second position in the two-wheeler industry in India.
https://www.bloombergquint.com/business/discover-100-cc-launch-my-biggest-career-blunder-rajeev-bajaj#gs.pYZ13eI - You have got to admit. HDFC is a great bank and one of the few banks that has managed to be on the top for a quite a long period of time. This financial year has seen a wholesale loan book growth of 22.8 percent to Rs. 3.5 trillion. It’s moved from a pure retail bank to an “everything” bank – which, at its size, is inevitable.
https://wap.business-standard.com/article-amp/finance/hdfc-bank-s-wholesale-loan-book-grows-23-to-rs-3-5-trillion-in-fy19-so-far-118112300015_1.html
