Tag: Stock market

Bit more positive on markets now, expect 15% earnings growth this year: Andrew Holland of Avendus

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

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Andrew Holland, CEO of Avendus Capital Alternate Strategies, spoke to CNBC-TV18 about the current trends in equity market and earnings growth.

“I have become a bit positive over the past month as market have reacted to some of things we have been worried for a long time and quite a number of those have reversed now,” Holland said on Monday.

“The other thing is if the trade war between China and the US continues then India stands out as a defensive market in global trade war situation because of being a domestic driven economy,” said Holland.

Talking about the earnings growth, he said, “We do not expect a blockbuster earnings growth and would stick by 15 percent as guided earlier.”

With regards to the IT sector, he said, “We do not expect further rupee depreciation so that tailwind for the sector will not be there. However, the big call is what the dollar is doing in 2019 and it is more likely that it will weaken but one does not know whether it would be in the first half or second. So IT at the moment is good defensive bet.”

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

As stock markets turn volatile, a look at the pros and cons of REITs

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

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Real estate investment trusts (REIT) are finally happening in India, and that’s a good news. While real estate as an asset class has always attracted both small and big investors, other investment instruments — gold, stock markets, fixed deposits, mutual funds etc… — have also been a part of well-diversified investment portfolios.

However, most of these asset classes have come with not-inconsiderable risks in recent times. The value of gold has eroded visibly, mutual funds have responded sharply to the recent stock market downturns, and fixed deposit returns barely break even after taxation.

Investors are looking for investment avenues that provide them steady income with minimal risks and under professional management, ultimately ensuring a decent return on investments. It can safely be stated that REITs could not have made their appearance in India at a more opportune time.

Investment in commercial real estate is a highly capital-intensive affair. REITs are a very viable option addition to investment portfolios because they allow investors to participate in an asset class previously reserved only for the affluent few. Also, as is the case in developed nations, REITs provide very decent returns with minimal risks.

How REITs will Benefit Small Investors

Let’s look at what we have at the current time. The Blackstone-backed Embassy Group includes the income-generating SEZ and IT parks under its first REITs listing – potentially a highly lucrative proposition for small as well as big investors to get involved in.

Today, the commercial real estate is doing exceptionally well in India, thanks to the aggressive expansion plans of both local and global businesses. Like mutual funds did for the stock market, REITs open a door to a potential treasure trove of returns to small investors – minus the downside of market downturns.

Stable rent-yielding Grade A commercial properties are high in demand with rentals seeing a steady increase. In sharp juxtaposition to the extremely volatile stock markets, Grade A office rentals will increase regardless of whether supply increases or decreases. There just isn’t enough supply to meet all the demand for this type of real estate, because the locations that qualify Grade A office assets have limited growth capacities.

In short, demand will always outstrip supply – and as long as this remains so, returns from REITs can only be in the green. They are far less prone to risks and will deliver decent returns over the short-to-mid-term.

Some of REITs’ USPs

REITs offer various advantages to investors:

• A low entry point – as low as Rs 2 lakh – effectively means that one can add real estate to one’s portfolio at a much lower investment.
• The projected return on investments are anywhere between 8-14 percent in the short-to-medium term (post adjustment of the fund management fee), with minimum risks. REITs are far less volatile than the stock market, FDs, mutual funds and gold because regulations maintain that 80 percent of the REITs listings must be of rent-generating assets.
• A lot of institutional capital is chasing the limited supply of investible Grade A office stock across top property markets. Therefore, the rents for these listed properties are very likely to rise steadily, and the contractual terms will be far more structured and transparent.
• REITs guidelines maintain that at least 90 percent of the net distributable income after tax will be distributed to investors at least twice a year.

US, Canada, UK, Singapore and Australia are some of the countries with dynamic and flexible REITs markets that have proved to be highly lucrative for investors. For instance, in Canada, the average return was around 10 percent in 2017, while in the UK it hovered between 8-10 percent. The average return in these countries includes all REITable assets such as commercial and residential.

In India, REITs have currently been limited to commercial Grade A office spaces – however, the umbrella of ‘commercial spaces’ also covers retail. In other words, investors of varying investment appetites and capacities will actually be sharing in the profits of India’s best shopping malls.

Expected ROI – REITs vs other asset classes

On the Flipside

The success of REITs in India will largely depend on the benefits they offer to investors. Currently, there are a plethora of taxes that may make REITs unattractive for many. For instance, when a REIT sells shares of assets, the capital gains are taxable.

In contrast, in the UK where REITs have been operating for over a decade now, there is no taxation on income and gains from their property rental business. Instead, shareholders are taxed on REIT-related property income when it is distributed, and some investors may even be exempt from tax altogether.

Further, in other countries, there have been exemptions from the stamp duty, as well. If and when India provides these tax benefits to investors, REITs will become all the more functional and lucrative in the long run. Also, if REITs are made more attractive for investors with such tax sops, the flood-gates of foreign funding into Indian real estate will open up in real earnest.

The Immediate Future

It will indeed be interesting to see the response to the first REIT listings in India. We do need to remember that, as is the case with any kind of real estate investment, the degree of their success depends heavily on a favourable macroeconomic environment backed by sound policy reforms.

To make the most of REITs in India and earn maximum returns, analyse the portfolio of projects included under the REIT. The analysis must include the stature and historic track record of the concerned entity, the developers’ portfolio, and the location advantages of the properties – including micro market, IT Parks, and so on.

Effectively, a REIT will drive price appreciation at the lowest risk if it includes Grade A commercial spaces with minimal vacancy, located in the best business-centric micro markets, with established rentals and occupiers.

Shobhit Agarwal is MD & CEO – ANAROCK Capital.

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

Rakesh Jhunjhunwala adds SpiceJet & Fortis to his portfolio, tweaks holdings in 5 stocks

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

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Big bull Rakesh Jhunjhunwala added Fortis Healthcare and SpiceJet to his portfolio, while increased stake in Dewan Housing Finance Corporation, or DHFL, as well as NCC during the quarter ended September, according to data available as of October 16.

Jhunjhunwala buys shares through his company Rare Enterprises, in his own or wife Rekha’s name as well as in the name of Rakesh Radheshyam Jhunjhunwala. Name of companies in which Jhunjhunwala or persons acting in concert held more than one percent stake are disclosed in the shareholding data released by the BSE as of October 16.

As many as 13 companies have declared their shareholding pattern for the September quarter. Jhunjhunwala kept his stake constant in seven out of 13 companies which includes Agro Tech Foods, Firstsource Solutions, Man InfraConstruction, MCX, and The Mandhana Retail Ventures.

He raised his stake in housing finance company DHFL during July-September quarter when the stock crashed 57 percent on the back of IL&FS-led liquidity crisis fears in the NBFC space.

As per the latest shareholding pattern, Rakesh Radheshyam Jhunjhunwala held 3.19 percent stake in Dewan Housing Finance Corporation by end of September quarter. The ace investor increased his stake in the company by 43 basis points from 2.76 percent in the June quarter.

The carnage on D-Street can be seen in Jhunjhunwala’s portfolio, who is referred to as India’s Warren Buffett by some. According to Forbes India, the ace investor is ranked 61 among Indian billionaires with a net worth of USD 2.5 billion.

Most of the stocks in the Jhunjhunwala’s portfolio fell up to 58 percent from July till date which includes DHFL (down 58%), Jaiprakash Associates (down 54%), SpiceJet (down 32%), Aptech (down 24%), and Agro Tech Foods (down 20%), among others.

Jhunjhunwala also added SpiceJet, which has fallen 32 percent in the quarter till date and almost 50 percent so far in 2018. He raised his stake in the low-cost airline to 1.25 percent.

Most of the airline stocks have been hit due to rising ATF prices, thanks to a swift rise in crude oil prices, along with the rise in competition.

Rakesh Jhunjhunwala also added Fortis Healthcare to his portfolio by acquiring over 2 percent stake (1.25 crore shares) in the company for the quarter ended September. The stock rose marginally from the quarter to date but has fallen by about 14 percent so far in 2018.

Jhunjhunwala sold off his stake in three companies as of data collated on October 16 — Crisil, Jaiprakash Associates and Lupin — for the quarter ended September.

(Source: Moneycontrol)

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

Sensex jumps over 300 points in opening trade; Infosys gains 3%

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

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India’s benchmark stock market index, Sensex gained nearly 380 points in the opening trade on Wednesday, led by software major Infosys following better-than-expected quarterly earnings.

At 09:30 AM, the S&P BSE Sensex was higher by 276 points or 0.8 percent at  35,438 while the NSE Nifty gained 0.7 percent to 10,657.

Infosys jumped about 3 percent after the company’s revenue growth in the September quarter was its highest in the past eight quarters.

Reliance Industries was up nearly 1 percent ahead of its second-quarter results on Wednesday.

Eicher Motors, Yes Bank, ICICI Bank, Infosys and IndusInd Bank were among the top five index gainers while Indiabulls Housing, NTPC and BPCL lost in trade.

On the macroeconomic front, the rupee opened at a two-week high at 73.41 against the US dollar while the oil prices continue to trade above $80 per barrel.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary

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

In a falling market, here are a few dos and don’ts to help long-term investors

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

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Even seasoned investors have panicked following the recent beating in the stock market. For long-term investors, the downturn in stocks, especially mid-caps has led to a massive erosion of wealth and confidence.

Fears of a liquidity crisis after the IL&FS default, escalating trade war tensions between China and the US, and other macroeconomic factors have led to the benchmark Sensex and Nifty tanking around 10 percent in the past month.

Given the increased volatility in market movements, most investors, including long-term investors tend to make a few mistakes in their investment behaviours. Even though this correction was long anticipated after a buoyant 2017, there are ways investors can come out of it stronger.

Here is a list of dos and don’ts in a falling market for long-term investors:

DOs:

Continue investing in Systematic Investment Plans (SIPs)

Mutual funds have also tanked in the past month. Panic selling by foreign investors has sucked liquidity especially from liquid and debt funds. However, from a long-term perspective, these dips are temporary. The market historically has bounced back from such corrections. It is best to avoid knee-jerk reactions and stop all investments.

One of the benefits of investing through SIPs is the principle of rupee-cost averaging. Buying more units at a lower price averages the cost per unit of the fund leading to greater gains when the market is in a bull phase. This is why long-term investors should continue to invest in SIPs especially in a falling market.

However, that being said, it doesn’t mean that you should not reevaluate their portfolio. If the mutual fund isn’t performing as well as its peers, you can switch to better performing funds. Mid-cap and small-cap mutual funds are seeing sharp corrections as reflected in the stocks these funds invest in.

If the fund is invested in quality stocks with good business potential, it makes sense to stay invested. If the risk and volatility in the market are more than your threshold, you can switch to a large-cap fund that is relatively more stable in its growth. There is no need to redeem the mutual fund till it shows growth.

In a falling market, it is better to stick to SIPs even if it may not be in the same funds you invested in.

Purchase quality stocks at attractive valuations

Most of the top 100 stocks on the Sensex are down 10 percent to 40 percent in the last one month. This presents an excellent opportunity to pick stocks that are fundamentally sound at attractive valuations. Several large-cap stocks and good quality mid-cap stocks have seen a correction.

However, investing in these fundamentally sound companies can pay off in the long run. Use the opportunity presented by a falling market to expand and diversify your portfolio in quality stocks.

One important point to consider is to invest in stocks after thoroughly studying them. A well-researched decision of buying a stock can pay off handsomely in the long run when the stock recovers.

DON’Ts:

Panic sell based on news

Most stocks have bled heavily in the past month in tune with the benchmark indices. News about many stocks reaching their 52-week lows has flooded the markets. As a long-term investor, this is not the time to sell off stocks in a panic.

If the stock is of a fundamentally sound company with good medium-term business prospects, then the stock will show a recovery in the next bull cycle.

If the company has strong earnings growth potential, then the stock will show an upside in the next earnings cycle itself. Resorting to panic selling will only lead to mounting losses unnecessarily. Long-term perspective iron out high and a low, which is why you should retain quality stocks for a 3-5 year horizon.

That being said, if a stock has no potential of recovering its value, it is best to sell and exit the stock. It is necessary to evaluate each stock and exit stocks which do not have a good earning potential or are facing repayment defaults.

Invest in stocks based on non-verified stock information

A falling market presents an opportunity for many people on the sidelines to enter the market. As such, several technical players speculate about the growth of a particular stock, especially stocks priced cheap. Investing in stocks without studying them thoroughly is a risky gamble, even in a falling market.

There are many people who look to capitalize on stocks that are trading at their 52-week lows, however, this is an extremely risky strategy because these stocks could be at their lows because of weak fundamentals. Make a decision to invest only once a stock shows good fundamentals and growth prospects for the medium to long-term.

To conclude, a falling market presents an excellent time for investors to invest in quality picks. By avoiding non-verified stock information and taking decisions after thorough research, a falling market can turn out to be profitable even for a long-term investor.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.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

Lot of negative news priced-in, IT sector looks very attractive: Tushar Pradhan of HSBC Global AMC

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

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India’s Sensex jumped more than 500 points in early morning trades on Friday, following a rout in the previous session, as a global selloff showed some signs of abating in Asia.

CNCB-TV18 spoke to Tushar Pradhan, CIO-India at HSBC Global AMC, about the recovery in domestic stocks and outlook.

“The Indian markets are always to going give us something to think about, so it is difficult to say whether worst is over for the market or not, but one needs to focus on factual data and other is sentiment, both local and external,” said Pradhan.

Talking about the earnings season that kicked off with in-line TCS results on Thursday, Pradhan, “One has already seen bad news both from the external as well as domestic but earnings could be the silver lining. So, one cannot say if the worst is over but a lot of the bad stuff is over.”

When asked about the chaos in NBFCs space, he said, “One cannot take a generic call on all the companies because each of the companies have a different market and their ability to raise capital to service that market is also different.”

“Companies which can show robust growth and are ring-fenced from these large macro moves – like companies that finance consumer discretionary items, it is matter of changing the capital structure, these companies will do well,” said Pradhan.

With regards to the IT sector that saw some selling pressure today, he said, “There is a fundamental case to invest and other is a valuation case to invest. In past most investment decisions were taken on growth but after the correction, the investment universe is looking attractive from a valuation perspective”.

According to Pradhan, “The IT space looks attractive for 2-3 reasons. One, is that GDP Growth in US is very strong, cash rich companies in US are looking to deploy money into investing into IT infrastructure. All this give confidence that the momentum for the sector will continue. The tailwind to the current earnings of IT companies is weaker rupee, so going forward there are reasons for earnings upgrades.”

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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

Closing Bell: Sensex holds 34,000, indexes end 2% lower, TCS ends 3% ahead of Q2 results, PSU bank stocks drag

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

Listen to the Article (6 Minutes)

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

Sebi calls for bigger, cleaner and safer markets

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

Listen to the Article (6 Minutes)

Market regulator Sebi on Tuesday called for bigger, cleaner and safer markets and enhancing the overall governance standards in the market for issuers, intermediaries or market infrastructure providers.

It also said that call on the recommendations by fair market conduct committee to further strengthen the rules to deter financial crimes like frauds, market manipulations and insider trading, will be taken soon.

“We are also equally committed to ensure clean and safe markets. We are duty bound to ensure that the market mechanism is not misused or manipulated by the unscrupulous elements,” Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi said at the ‘Ficci CAPAM 2018’ conference.

“The fair market conduct committee constituted by Sebi has since submitted its recommendations, which were also put in public domain seeking comments. A view on these recommendations will be taken soon,” he added.

He said that the the manipulators will not be allowed to take advantage of the volatility in the stock market, which has plunged by around 900 points decline in the last two days on a combination of global and domestic factors impacting investor sentiment.

“The domestic markets are volatile, but they are globally volatile too. Our risk management economics are in place and manipulators will not be allowed to take advantage,” Tyagi said, adding that the regulator is vigilant.

He warned that increase in oil prices, tighter global financial conditions, spillover risks from a global trade conflict and rising regional geopolitical tensions are some of the potential economic risks for the country, despite a positive economic growth outlook.

Tyagi said objectives of improving ease of doing business and maintaining market integrity have to be properly balanced.

“While it may not be always possible to accurately quantify the costs and benefits of making a regulation, it will be our endeavour to keep on improving the processes going forward,” he said.

The Sebi chairman said that the continued investor confidence is a crucial factor in attracting more investors to the securities market and right governance framework and a transparent and clean market go a long way in meeting these expectations of investors at large.

“Sebi will continue to focus on further enhancing the overall governance standards in the market, be it for issuers, intermediaries or market infrastructure providers,” said Tyagi.

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