Rupee gains 18 paise to 74.43 against US dollar in early trade

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

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The Indian rupee strengthened by 18 paise to 74.43 against the US dollar in early trade on Thursday, tracking positive domestic equities. At the interbank foreign exchange, the domestic unit opened at 74.46 against the dollar, then inched higher to 74.43, registering a gain of 18 paise over its previous close.

On Tuesday, the rupee had settled at 74.61 against the US dollar. Forex market was closed on Wednesday on account of ‘Bakri Id’.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.01 percent up at 92.76. The rupee opened stronger on Thursday as the dollar eased and risk appetite improved, Reliance Securities said in a research note.

The recovery in US equities suggests that investors believe that the economic impact of the coronavirus is likely to be quite limited. Furthermore, expectations are that the increase in infection is likely to make the Federal Reserve all the more wary of removing its accommodation, the note added.

On the domestic equity market front, BSE Sensex was trading 572.74 points or 1.10 percent higher at 52,771.25, while the broader NSE Nifty advanced 161.45 points or 1.03 percent to 15,793.55. Meanwhile, foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,834.96 crore, as per exchange data.

Global oil benchmark Brent crude futures declined 0.42 percent to USD 71.93 per barrel.

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Olympics: Director of opening ceremony fired over Holocaust comments

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

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On the eve of the Tokyo Games, organisers fired the director of the opening ceremony over comments he made about the Holocaust, while media reported former Prime Minister Shinzo Abe, a memorable advocate for the Tokyo Games, would skip the showpiece event.

The news is the latest in a series of embarrassments for Tokyo organisers that have sparked outrage at home and abroad and comes just days after a well-known musician was forced to step down as composer for the ceremony after old reports of his bullying and abusive behaviour surfaced.

Abe, who famously dressed up as the titular plumber from the video game Super Mario at the Rio Games to represent Japan, played an outsized role in attracting the Olympics to Tokyo.

In a speech in front of a banquet room full of International Olympic Committee members in 2013 that the lingering nuclear disaster at Fukushima was “under control” and pitched his nation as a “passionate, proud, and a strong believer” in the Olympics.

At the time, Abe and his supporters hoped the Olympics would parallel the 1964 Tokyo Games heralding the nation’s revival after decades of economic stagnation and also mark its recovery from a devastating nuclear and natural disaster in 2011.

Instead, the Games, delayed a year because of the global pandemic, has faced a series of setbacks, including the exit of Yoshiro Mori, the former head of the Tokyo 2020 organising committee, who resigned after making sexist remarks. That was soon followed by the resignation of Tokyo Olympics creative head Hiroshi Sasaki after he made derogatory comments about a popular Japanese female entertainer.

The Tokyo 2020 organising committee said Kentaro Kobayashi, who is listed as a show director for the Games’ opening event, was fired after a joke he made about the Holocaust as part of his comedy act in 1998 resurfaced in domestic media.

The Simon Wiesenthal Center, an international Jewish human rights organisation, had earlier released a statement condemning Kobayashi’s past behaviour.

“Any association of this person to the Tokyo Olympics would insult the memory of six million Jews and make a cruel mockery of the Paralympics,” said Abraham Cooper, a rabbi and associate dean and global social action director of the centre.

SUBDUED AFFAIR

The opening ceremony on Friday, which normally stands as a major showcase of the host nation, is set to be a subdued affair, with Japanese media reporting that less than 950 people – including only around 15 global leaders – are set to attend.

First Lady Jill Biden is expected to land in Tokyo on Thursday afternoon for the Games’ opening ceremony, raising expectations she might also use her attendance to discuss vaccines with Prime Minister Yoshihide Suga.

Biden has been travelling across the United States urging more people in the country to get inoculated.

Only a third of Japanese have had at least one dose of the vaccine, fuelling public concerns that the Olympics could become a super-spreader event. Already dozens of attendees have tested positive for COVID-19, forcing athlete withdrawals and teammates into isolation.

NHK said Abe decided against attending the ceremony after the Japanese government declared a state of emergency and virus restrictions over Tokyo, in an effort to minimise health risks among residents and visitors. Abe’s office could not immediately be reached on Thursday, a public holiday in Japan.

COVID-19 infections have jumped in the capital and are projected to spike further, straining healthcare providers.

In a recent poll in the Asahi newspaper, 68 percent of respondents expressed doubt about the ability of Olympic organisers to control coronavirus infections, with 55 percent saying they opposed the Games going ahead.

Olympics competition has already begun, with the Japanese women’s softball team getting the hosts off to a winning start on Wednesday, while the highly ranked US women’s soccer team were upset by Sweden.

The second day of softball began early Thursday under cloudy skies in Fukushima with the United States defeating Canada by a run to go 2-0 in the standings. Japan faces Mexico later.

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Indiabulls Housing Finance gains over 4% after Rakesh Jhunjhunwala acquires 2.2% stake

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

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Shares of Indiabulls Housing Finance were up over four percent on Thursday after ace investor Rakesh Jhunjhunwala acquired a 2.2 percent equity stake in the company, in the quarter ended June 2021. In the current year 2021 so far, the country’s leading mortgage lender has rallied 20.8 percent.

The big bull bought one crore equity shares or 2.17 percent of the total paid-up equity capital of Indiabulls Housing, as per the shareholding pattern of the June 2021 quarter published on July 21. He did not hold any stake in the previous quarter, the data showed.

In June, Blackrock Funds had acquired additional over 25 lakh equity shares in the housing finance company on June 11, taking the total stake to over 3 percent in the company.

Meanwhile, on June 29, Indiabulls Housing Finance’s board of directors approved fundraising of Rs 5,000 crore on a private placement basis, and another $275 million by issuing equity shares or other instruments.

Indiabulls Housing, one of India’s leading housing finance companies (HFC), is part of Indiabulls Group and offers home loans in the affordable housing segment. The mortgage financier reported a two-fold jump in its net profit to Rs 276 crore in the quarter ended March.

At 10:50 am, Indiabulls Housing Finance shares were trading 3.91 percent up at Rs 276.35 apiece on the BSE.

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Angry Indian farmers to protest near parliament

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

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Indian farmers, protesting over three new farm laws they say threaten their livelihoods, will start a sit-in near parliament in the center of the capital New Delhi in a renewed push to pressure the government to repeal the laws.

In the longest-running growers’ protest against Prime Minister Narendra Modi’s government, tens of thousands of farmers have camped out on major highways leading to New Delhi for more than seven months.

As India’s monsoon session of parliament began this week, some protesting farmers tried to march towards the main government district, but they were stopped by police just miles from parliament.

On Thursday, 200 protesters will gather at Jantar Mantar, a large Mughal-era observatory in central New Delhi that doubles up as a protest site for causes of all manner.

Also Read: Delhi Police tightens security at Jantar Mantar ahead of farmers’ protest against farm laws

“Throughout the monsoon session of parliament, 200 farmers will go to Jantar Mantar every day to hold farmers’ parliament to remind the government of our long-pending demand,” said Balbir Singh Rajewal, a leading farmers’ leader.

The monsoon session of parliament will end in early August.

After extended negotiations, Delhi police have agreed to let 200 farmers gather during the day at Jantar Mantar, but protesters need to follow coronavirus guidelines issued by the Delhi Disaster Management Authority, a government statement said.

In late January, thousands of angry farmers clashed with police after driving their tractors into security barriers. One protester was killed, and more than 80 police officers were injured across the city.

Farmers say the laws favor large private retailers who, prior to the new laws, were not permitted to procure farm goods outside government-regulated wholesale grain markets.

The government says the laws, introduced in September 2020, will unshackle farmers from having to sell their produce only at regulated wholesale markets.

It argues farmers will gain if large traders, retailers and food processors can buy directly from producers.

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ICICI Prudential shares up 6% after June quarter results; should investors buy, sell or hold?

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

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Shares of ICICI Prudential Life Insurance were up almost six percent on Thursday on the BSE after the insurer on Tuesday opened the earnings seasons for the life insurance sector with a massive Rs 500 crore claims arising due to the coronavirus pandemic and reported a net loss of Rs 185.73 crore for the quarter ended June.

However, the company reported good all-around numbers, including a 71 percent growth in the key metric of the value of the new business premium. The second-largest private-sector life insurer had posted a net profit of Rs 287.59 crore in the year-ago period. In the previous quarter (January-March 2021), the insurer reported a profit of Rs 63.78 crore..

In a regulatory filing, ICICI Prudential said that the total income was down at Rs 16,724.05 crore in the quarter under review as against Rs 19,057.42 crore in the year-ago period. Of this, the net premium income was Rs 6,601.85 crore as against Rs 5,551.07 crore.

Here’s what brokerages have to say on ICICI Prudential’s stock and Q1 performance:

CLSA

The brokerage has maintained a ‘buy’ rating on the stock after its June quarter earnings with a target at Rs 725 per share. It noted that the company’s first-quarter performance beat estimates notably with its VNB margin at 29.4 percent. The brokerage expects a VNB CAGR of 25% over FY21-23 and lifts the VNB estimates by 13-14 percent.

City

The brokerage has a ‘buy’ rating on the stock with the target at Rs 750 per share. It noted that the company’s favourable product mix is driving VNB margin expansion. The brokerage has raised the company’s FY22/FY23 VNB estimates by six percent /three percent as they factor in the higher VNB margin. It has also lowered its FY22/FY23 profit estimates by 18 percent/13 percent as they factor in higher claims owing to COVID-19 pandemic and Opex.

Morgan Stanley

The brokerage has a ‘buy’ call on the stock with the target at Rs 700 per share. It noted that the company delivered a 20 percent VNB beat in a tough quarter. This pickup in VNB growth after recent sluggish growth should help rerate the stock, the brokerage said.

Goldman Sachs

The brokerage has a ‘neutral’ rating on the stock with the target at Rs 570 per share. The brokerage said, “ICICI Prudential’s Q1 beat was driven by group term, tops up COVID provisions. We revise FY22E-FY24 VNB estimates higher by up to two percent.”

The brokerage also said that the FY23 VNB guidance implies a CAGR of 28 percent over the next two years which is seemingly a tough act to achieve.

UBS

The brokerage has a ‘buy’ call on the stock with the target at Rs 690 per share. It noted that the company’s strong core business performance will overshadow its weak accounting profits. The brokerage also noted that elevated claims and higher COVID reserving dents profitability.

It expects VNB margin to normalise with an evolving product mix. The company maintained its guidance to double its FY19 VNB by FY23, in line with estimates.

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Parliament Monsoon Session Highlights: TMC MPs tear papers as IT Minister reads statement; farmer leaders suspect govt ‘snooping’ on them

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

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Parliament Monsoon Session Highlights: Both Lok Sabha and Rajya Sabha were adjourned till Friday following sloganeering by opposition members over various issues.

Meanwhile, the government will seek action against some Opposition MPs who allegedly misbehaved with the treasury bench members in the Rajya Sabha on Thursday after a TMC MP snatched papers from Information Technology Minister Ashwini Vaishnaw and tore those as he was about to make a statement on the alleged snooping row. Government sources said some Opposition MPs “misbehaved” with the treasury bench members, including a minister, even after the House was adjourned.

With a group of farmers reaching Jantar Mantar here to protest against the three new farm laws, Union Agriculture Minister Narendra Singh Tomar on Thursday urged them to leave the path of agitation and come for talks. Tomar said farmers across the country have favoured the three farm laws

Stay tuned with live updates

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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

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Gold hovers near 1-week low as risk appetite returns; ECB meet in focus

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

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Gold prices fell on Thursday, hovering near a more than one-week low, weighed down by a stronger dollar and a rebound in risk sentiment as investors looked past economic threats from rising cases of the Delta coronavirus variant.

Spot gold was down 0.3 percent at USD 1,798.27 per ounce, as of 0313 GMT, after hitting its lowest since July 12 at USD 1,793.59 in the previous session.

US gold futures eased 0.3 percent to USD 1,798.70 per ounce.

“Gold prices are under pressure because the dollar is now hovering around highest in three months and Wall Street rebounded for the second day meaning that traders are shrugging off virus concerns and back to reflation trade,” said Margaret Yang, a strategist at DailyFX.

Asian stocks rallied on Thursday on the back of overnight gains in Wall Street, as investors largely overlooked apprehension about the Delta coronavirus variant and inflation.

The dollar index held steady, hovering below a 3-1/2-month peak ahead of the European Central Bank policy decision later in the day.

Policymakers will implement for the first time changes to their strategy and are all but certain to promise an even longer period of stimulus to make good on the commitment to boost inflation.

“ECB is widely expected to remain dovish, so this may lead euro to weaken against the dollar causing the greenback to rise, which will be negative for gold. For now, gold’s near-term momentum seemed to tilt to the downside,” Yang said.

Meanwhile, Benchmark US Treasury yields continued their bounce from five-month lows following a weak 20-year bond auction.

Spot gold may break a support at USD 1,795 per ounce and fall towards USD 1,785, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver edged 0.1 percent lower to USD 25.21 per ounce, palladium rose 0.4 percent to USD 2,665.21, and platinum was steady at USD 1,080.39.

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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

5 strategies to manage your mutual fund portfolio risk

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

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As mutual funds primarily invest in financial instruments listed in markets, they are prone to the market risk of their portfolio constituents. The key to successful investment in mutual funds is not the elimination of market risk itself, but to manage it through judicious portfolio selection and rebalancing as per your risk appetite.

Here are 5 crucial strategies for retail investors to manage their portfolio risk:

Select funds basis your risk appetite

Your risk appetite primarily depends on your income stability, liquidity and time horizon of crucial financial goals. For instance, investors having long-term financial goals can choose equity mutual funds, as equities have the potential to beat returns of fixed income products by a wide margin over the long term. While equities can be very volatile in the short term, a longer investment horizon allows equity investments more time to recover from the losses caused by market volatility.

Similarly, investors witnessing income uncertainty may have to park higher amount in debt funds in order to preserve their capital and liquidity to face periods of income and cash flow disruptions.

As various mutual fund categories contain different amount of risk appetite, make sure you take your risk appetite into consideration when selecting funds.

Opt for the SIP route for regular investment

SIP allows mutual fund investors to invest a predetermined amount automatically from their bank account at a pre-set date for buying units in the chosen mutual fund scheme. As investments through SIPs are spread over a period of time, the investment cost gets averaged during market dips and corrections.

To make the most of the entire investment cycle, equity fund investors should try to continue with their SIPs for at least 5-7 years. Also, given that SIP installments are deducted automatically from your source account, it helps in instilling financial discipline and eliminates the need for market timing.

Avoid investing in NFOs due to lower NAVs

New Fund Offers (NFOs) are first-time subscription offers of new mutual funds offered to the public at a face value of Rs 10. Many distributors try to upsell NFOs citing their lower NAVs. Instead of considering the lower offer price as the basis for investing in NFOs, investors should consider the past record of other funds managed by the NFO’s fund manager and the concerned fund house.

Opt for an NFO only if it matches your risk appetite and financial goals. If not, then continue with your existing mutual fund schemes having an excellent track record of beating its peer funds and benchmark indices.

As far as investing in NFOs of sector or thematic funds is concerned, only those having a higher risk appetite and the ability to closely track the underlying sector or theme should opt for it.

Diversify your mutual fund portfolio

Fresh retail investors usually invest their entire investible surplus in 1-2 mutual funds, which had delivered good returns in the near past. However, note that doing so concentrates the market risk in only one or two fund management teams. If the chosen funds perform poorly owing to the investment strategies of the fund managers or various market-related factors, the whole investment may underperform for an extended period. Thus, investors must diversify their investments across various fund houses to lower their concentration risk. If any of the funds underperform, then the other funds may be able to generate sufficient returns to compensate for the losses.

Periodically review the investment portfolio

A periodic review of the performance of your mutual fund investments will help identify underperforming funds and correct any deviations from the original asset mix set for the investment portfolio. Note that fund management styles and various market factors can lead excellent performing funds of the past to underperform for a longer time period. Thus, compare the performance of funds with their peer funds and benchmark indices every 3 months. Redeem the ones that have been constantly underperforming their benchmark and peers over the past 3 years.

Sahil Arora is Senior Director at Paisabazaar.com. The views expressed are personal

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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

Tax department raids multiple premises of media group Dainik Bhaskar

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

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The Income Tax Department on Thursday conducted raids against the media group Dainik Bhaskar in multiple cities over alleged tax evasion, official sources said. They said the searches are being conducted in Bhopal, Jaipur, Ahmedabad and some other locations in the country.

While there was no official word from the department or its policy-making body, the Central Board of Direct Taxes (CBDT), official sources said the action also involves the promoters of the major Hindi media group with operations across multiple states.

Congress leader and former Madhya Pradesh chief minister Digvijaya Singh said on Twitter that tax officials “are present” at half a dozen premises of the group, including at its office at Press Complex in state capital Bhopal.

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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