Month: June 2021

Importance of having an emergency corpus during the pandemic

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The COVID-19 pandemic has evolved from just being a health emergency – it is now a full-blown economic crisis. Organizations operating in different domains have witnessed a sudden loss of demand for their products and services and are plagued with liquidity issues. In a desperate attempt to survive, many organizations are forced to resort to extreme measures like pay cuts and layoffs. According to CMIE (Center for Monitoring Indian Economy), more than 12 crore Indians lost their jobs during the lockdown period!

Since job security has become a myth and it is becoming increasingly difficult to maintain a steady flow of income, those who are still in a position to do something should consider building an emergency corpus as it can come in very handy during such troubling times. Even if things have gotten better for you, for the time being, it’s impossible to predict when another global disaster would strike us. Things can change within a matter of days and hours and it is better to be prepared for the worst-case scenario.

What an emergency corpus does is that it takes care of all your monthly expenses in case your income stream dries up suddenly. As a rule of thumb, you should build your corpus in a way that it can take care of your expenses for at least six months. However, considering the current circumstances, it is advisable to build a corpus for at least 12 months – especially if you’re employed with organizations that are working in vulnerable sectors like travel and hospitality. Now that we’ve decided on the duration, let us see what the best place to park it is.

Well, you should always park your emergency corpus in liquid investments. You can consider keeping some portion of it in a savings bank account, while liquid funds are also a great idea as they are tax-efficient over a longer duration.
Since liquid funds invest in debt papers of maturity up to 91 days, therefore, they are less volatile. If you withdraw your liquid mutual fund investment after three years, the gains you’ve accumulated will be taxed at the rate of 20 percent + indexation. Compared to this, the fixed deposits and savings account interest is taxed at the slab rate. Indexation reduces the tax liability greatly.

What do you need to keep in mind to build a corpus during the pandemic?
The current scenario is quite volatile and if you’re looking to build a corpus during such a difficult time, you need to keep two things in mind:

• Patience; and

• Strategy

Patience

People often invest in mutual funds to build a retirement corpus, but as soon as they spot that the market might be taking a u-turn, they become terrified. They stop investing altogether and tend to bail out – even if they have to bear the losses while doing so.

Patience, therefore, is a key trait for building a corpus, especially if you’re in it for the long run. The market serves as a barometer for the Indian economy, and if you have faith in the country’s growth, then you should also have faith in the market.

During the March of 2020, as the pandemic began taking its toll on the market, many people exited their corpus prematurely as they could not stay patient and weather the storm. There were also those people who stood their ground and even added to their corpus. We’re now seeing that those who stayed patient are now beginning to reap the benefits, whereas those who exited out of panic and fear, are regretting their decision. So, if you’re in it for the long run, you shouldn’t let a market crisis change your mind or objective.

Over time, the market will always bounce back. If, however, you’re investing for short-term benefits, then you’d be better off cutting your losses.

Strategy

Strategy refers to how you divide your corpus according to the risk factor. Let us take a look at what the optimum investment strategy should be:
First, we need to discuss the high-risk path. Suppose you saw a product or a service and you thought it has the potential to balloon up. If the company isn’t well established already, it would be a high-risk investment. You shouldn’t invest more than 20% to 30% of your capital in high-risk stocks.
You can invest 30% of your capital in mutual funds, which are medium-risk stocks.

The Nifty50 index is the option that involves the lowest risk. Over a long period, the Nifty50 index is only going to grow because its growth is directly influenced by the top 50 companies in the country at any given moment in time.

Besides all this, build a liquid corpus as well. Even though it is a no-risk, no-return option, there is a benefit. When there’s blood on the street, you can transfer the liquidity into your high, medium, and low-risk portfolios as per the need. This can seriously help you accumulate returns during unfavorable times.

If you keep these simple tips in mind, you can build a relatively safe emergency corpus that can serve you well if the financial situation becomes unfavorable in the future.

The author, Rachit Chawla, is CEO and Founder at Finway FSC. The views expressed are personal

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MarketBuzz Podcast With Ekta Batra: Sensex, Nifty likely to open higher; Auto stocks, ITC in focus

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian indices are likely to open at new highs on Tuesday after the Indian economy reported better than expected GDP growth in FY21. The trend on SGX Nifty also indicates a positive start for the broader index in India. The Nifty futures were trading 52.50 points or 0.34 percent higher at the 15,632.50 level on the Singaporean Exchange at 8:10 am.

About MarketBuzz

The CNBCTV18.com podcast on the big themes, vital news and key events that you should know before the opening bell, powered by CNBC-TV18 anchors. MarketBuzz is your daily morning briefing by CNBC-TV18 research analysts and anchors Sonia Shenoy, Ekta Batra, Anisha Jain, Nigel D’Souza and Mangalam Maloo to jumpstart your stock market investing. Subscribe to our free podcasts on Audioboom or listen on the featured podcast page on CNBCTV18.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lakshadweep: Why is a tranquil Indian archipelago simmering in protest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Lakshadweep, a normally tranquil group of islands off the southwest coast of India, is simmering with tension over new rules and proposals being introduced by a lawmaker from the ruling Bharatiya Janta Party. Opponents say the measures are ”anti-people” and threaten the livelihoods of islanders.

What started as a Twitter campaign by students gained traction last week, with #SaveLakshadweep being backed by prominent politicians including opposition leader Rahul Gandhi. Adding to the bad feeling, a protest against a local official’s comments on drug abuse resulted in 23 arrests, according to Indian media.

The Kerala state legislative assembly adopted a motion on Monday demanding protection for people’s livelihoods and the removal of the lawmaker, Praful Patel.

Located in the Arabian Sea, with white sands and clear blue waters, Lakshadweep is often called India’s Maldives. The islands come under the jurisdiction of the High Court in Kerala, the nearest mainland state.

WHAT ARE PEOPLE PROTESTING?

Located nearly 500 km (300 miles) off Kerala, Lakshadweep is a group of 36 islands with a population of about 65,000, predominantly Muslims. The islands – popular with tourists – are run by an administrator appointed by the President of India.

Administrator Patel, who took charge in December 2020, has proposed a slate of draft rules, including some that would give him powers to remove or relocate islanders from their property for town planning or development or declare land to be a ”planning area”, and one which would allow the administration to detain any person without trial for up to a year.

Other proposals involve a ban on cow slaughter and allowing some businesses to sell alcohol, seen as offending religious sentiments. Currently, the sale and consumption of alcohol is largely banned in the islands.

The Bharatiya Janata Party, to which Patel belongs, has often been criticized for pushing a homogenised culture across India, raising fears among islanders that they face cultural conflict.

Both Patel and the local district collector’s office did not respond to repeated requests for comment.

HOW DID IT START?

The Lakshadweep Students Association (LSA) began a campaign on Twitter and Instagram earlier this month, which gained momentum after Elamaram Kareem, a member of parliament from Kerala, wrote to India’s president urging a change of guard in the archipelago.

Rahul Gandhi, leader of India’s opposition Congress party, wrote to Prime Minister Narendra Modi asking him to ensure that the orders are withdrawn. ”Lakshadweep is India’s jewel in the ocean. The ignorant bigots in power are destroying it. I stand with the people of Lakshadweep,” he tweeted

Islanders depend on Kerala for logistical support, and on Monday, the Kerala legislative assembly passed an unanimous resolution, moved by chief minister Pinarayi Vijayan, demanding the recall of Lakshadweep administrator Patel.

Kerala is essential to the archipelago as locals rely on it for basic supplies, while others travel there for education, employment, and medical treatment.

WHERE DO THINGS STAND NOW?

Patel, who has also been criticized for relaxing quarantine guidelines which led to a spike in COVID-19 cases this year, has told the media that his changes will boost tourism in Lakshadweep and there are no plans to roll them back.

Modi, Home Minister Amit Shah, and the president have not yet issued public statements.

Explained: Outcry in Lakshadweep over new administrator’s moves

Meanwhile, students and other citizens plan to keep their campaign going. ”We will keep protesting until he (Patel) is revoked from the post of administrator,” said Azeem Fayiz, central committee member of the Lakshadweep Students Association.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Delhi-Colombo-Beijing triangle undergoes another shift

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chinese Defence Minister Gen. Wei Fenghe was in Sri Lanka last week seeking to shore up support for Chinese projects at a time when new faultlines have emerged in the island nation on China’s growing footprint. This was the second high profile Chinese visit to Sri Lanka after the one by Yang Jiechi, Director of the Office of the Central Commission for Foreign Affairs of the ruling Communist Party, in October last year. Even during the pandemic, Beijing’s overtures to Sri Lanka have continued unabated with an awareness that perhaps this a unique moment to push Chinese influence as the Rajapaksa clan is in full control. The Chinese embassy in Sri Lanka has taken an unusually high profile role in pushing the cause of the Chinese-built Port City in Colombo.

The Colombo Port City project is important for China as a key node in its Maritime Silk Road in the Indian Ocean and so it is to be expected that Beijing will go all out in ensuring its finalisation. Sri Lanka is touting this $1.4 billion project as the single largest private sector development ever in the island nation in an attempt to justify bending the domestic laws in its favour. And this has generated a massive outcry from various groups in the country who see this as a violation of Sri Lankan sovereignty.

Apart from President Rajapaksa Gotabaya’s ruling party—Sri Lanka Podujana Peramuna—most other political stakeholders, including the Buddhist monks, have opposed this contentious project. Despite this hue and cry, the Colombo Port City Economic Commission Act is now effective with its validation by the Speaker of the Sri Lankan Parliament. It is likely to give China unfettered control over some prime real estate, with the Sri Lankan government’s authority becoming marginal even when issues of movement of people and use of Yuan are concerned.

China’s growing economic footprint in Sri Lanka in recent years is no longer news as more than $8 billion worth of infrastructure projects have been undertaken by Beijing. But the costs have been rising as was reflected most categorically in the case of Hambantota port which despite its unwillingness, Rajapaksa’s successor was forced to hand over to China in 2017 on a 99 years lease. It was Mahinda Rajapaksa who had signed the Hambantota deal with Sri Lanka to begin with and today once again the Colombo Port project is being pushed by the Rajapaksas without any suggestion that past behaviour of China has been taken into account. Today, Chinese influence is so palpable that in place of Tamil, it is Mandarin is being included in the signboards of government projects in contravention of the official trilingual policy in the country wherein Sinhala, Tamil and English are used.

China had used the previous term of the Rajapaksas to its advantage and this time around it’s looking to be the same story. Beijing’s foothold is getting firmer by the day and it is ordinary Sri Lankans that will have to bear the brunt of Rajapaksa largesse eventually. After an initial positive outreach to India, the Rajapaksa’s famous tilt to China is back.

Earlier this year, Sri Lanka cancelled its $500 million agreement with India and Japan to develop the East Container Terminal (ECT) project under the pretext of local opposition. It changed tack and sought investments from the two countries for the West Container Terminal of the Port of Colombo under a public-private partnership model. Where the Rajapaksa government has had no compunction in pushing through a highly unpopular Colombo Port City Project under the Chinese influence, it decided to give India and Japan short shrift.

Amidst rapidly shifting geopolitical trends in the Indo-Pacific, Sri Lankans understands that it will be much sought after and has suggested that it is “observing the rise of Quad as an exclusive military alliance.” This is a sentiment in tune with the Chinese worldview. How this can be reconciled with Sri Lanka’s Foreign Secretary Jayanth Colombage’s remarks that “we will not, we cannot be, we should not be a strategic security concern to India” remains to be seen.

Chinese grip over Sri Lanka is getting tighter and the challenges for India will continue to mount. President Gotabaya has made it clear that Sri Lanka wanted to learn from the Chinese Communist Party’s “governance experience.” This learning has so far entailed ‘white elephant’ infrastructure projects being pursued that had only enriched the Rajapaksas even while severely indebting the nation.

At a time when several nations around the world are reassessing Chinese investments and its model of economic partnership, Sri Lanka under the Rajapaksas has decided to double down on their economic engagement with China. This economic engagement is already having a strategic fallout by enhancing the ability of the Chinese Navy to project power in the waters of the Indian Ocean. India-Sri Lanka ties seem to be entering turbulent waters and the Rajapaksas are making it clear that for all their rhetoric, they are not really interested in balancing between New Delhi and Beijing.

— Professor Harsh V Pant is Director, Studies and Head of the Strategic Studies Programme at Observer Research Foundation, New Delhi and Professor of International Relations at King’s College, London. The views expressed in the article are his own

Read his other columns here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Fuel prices at new record highs; petrol rates reach Rs 100.72 in Mumbai

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The oil marketing companies (OMCs) hiked petrol prices by 25- 26 paise and diesel by 23-24 paise per litre today across metros. The fuel rates were also increased on Monday.

Accordingly, the price of petrol and diesel increased to Rs 94.49 and Rs 85.38 per litre in Delhi today, as per Indian Oil Corporation, the country’s largest fuel retailer. In Mumbai, the petrol price changed to Rs 100.72 per litre on Tuesday. The cost of diesel advanced to Rs 92.69 a litre.

The prices of petrol and diesel are reviewed by oil marketing companies such as state-run Indian Oil on a daily basis and any revision is implemented from 6 am in the morning. The fuel prices vary from state to state in the country due to the value-added tax or VAT.

Oil prices rose on Tuesday ahead of an OPEC+ meeting and on optimism that fuel demand will grow in the months ahead with the summer driving season starting in the United States, the world’s top oil consumer, according to news agency Reuters.

Brent crude futures for August LCOc1 gained 56 cents, or 0.8 percent, to $69.88 a barrel by 0125 GMT. US West Texas Intermediate crude CLc1 for July was at $67.33 a barrel, up $1.01, or 1.5 percent from Friday’s close, with no settlement price for Monday due to a US public holiday, the report said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Individuals, society have responsibility towards children orphaned by Covid: Gadkari

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Union Minister for Road Transport Nitin Gadkari on Monday said every individual and the society have a responsibility towards the children who became orphan during the coronavirus pandemic. He was speaking at the inauguration of a COVID-19 care centre in Vatsalya village in Mathura district in Uttar Pradesh.

”The service to dalit, the exploited, orphan, physically challenged and medically ill, in fact, is service to God,” the minister said at the virtual inauguration event. The Covid care centre in Vatsalya village is a step in that direction, Gadkari said.

Addressing the event, Uttar Pradesh Chief Minister Yogi Adityanath said the country could overcome the challenge of the second wave of the coronavirus pandemic due to joint efforts of the central and state governments under the dynamic leadership of Prime Minister Narendra Modi.

Also Read: WHO renames COVID-19 variants from India as ‘Delta’ and ‘Kappa’

Railways Minister Piyush Goyal said he was hopeful that under the direction of Didi Maa Sadhvi Ritambhara, the hospital would set an example in the treatment of COVID-19 and other patients. The hospital was inaugurated by Union Minister for Health Harsh Vardhan.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Cyclone Tauktae impact: Gujarat plans to reinstall 30% uprooted fruit trees

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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To minimise the loss incurred by farmers dependent of horticulture, the Gujarat government on Monday said it plans to save at least 25 to 30 percent of the fruit trees uprooted due to the cyclone Tauktae across the state by using ”reinstallation” technique. Scientists of four major agricultural universities will provide necessary guidance to farmers on ”reinstalling” their uprooted trees, such as those of mango, coconut, sapota (chikoo), and pomegranate, at the same place where they were grown, according to a government release.

A detailed action plan and guidelines regarding reinstallation of uprooted fruit trees will be announced soon, said the release. The action plan will be based on experience of scientists who have visited the places where a large number of trees were uprooted by the powerful cyclone that hit the Gujarat coast two weeks ago, it said.

The government had sent as many as 258 scientists of four major state-run agricultural universities to over 1,200 villages of the Saurashtra and south Gujarat regions to guide farmers in minimising their loss by carrying out replantation of uprooted fruit trees, the release said. These scientists stayed in the rural areas for around two weeks and gave guidance to over 11,000 cyclone-hit farmers, it said.

The scientists gave life demonstrations on how to carry out replantation of mango, coconut, pomegranate, and other fruit trees which were uprooted in the cyclone said the release. These agri scientists on Monday held a meeting with Chief Minister Vijay Rupani and other key government functionaries and shared their experiences.

After the meeting, the CM announced to prepare a detailed action plan as well as guidelines for the tree re- installation exercise. As per the guidance provided by the scientists during the meeting, the government is confident of saving 25 to 30 percent of uprooted trees by way of reinstallation at the same place, the release said, quoting Rupani.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock Market Highlights: Sensex, Nifty end flat dragged by metals, banks; smallcaps underperform

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stock Market Highlights: Indian equity indices, Sensex and Nifty ended Tuesday’s volatile session flat dragged down by selling in banks, metals and auto stocks. Broader markets, midcap and smallcap indices also closed lower. Except for IT, media and pharma, all other sectoral indices ended in the red.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow