IMF report warns of rising risks in economy, Reliance in bullish trend; all this and more on Moneycontrol Pro

Firstpost
October 18, 2019

Finally, some great news! India’s fastest-growing financial subscriptions service, Moneycontrol Pro, is available both on the website and mobile apps.

Moneycontrol Pro offers curated markets data, independent equity analysis, insights into investment styles and exclusive trading recommendations. In sum, all the information you need for wealth creation.

Lower taxes mean higher earnings but that’s just the tip of the iceberg
A number of companies have declared that they have shifted to the new lower corporate tax rate while declaring their September quarter earnings. Their post-tax profit rose by a much higher rate than PBT. While the earnings bump is good news for shareholders of these companies, the tax cuts’ effects don’t end there. For instance, HUL’s management mentioned it was working on different scenarios on how to reorient manufacturing and its supply chain. This could mean significant changes to how it has done business. Other companies who shift to the new tax regime are likely to undertake a similar exercise. Their decisions could unleash a wave of change in how companies do business. While this may seem an ambiguous statement at this point, here are a few scenarios that could make them more tangible. 

IMF report warns of rising risks in economy, markets and firms
While markets across the world have been buoyed by loose financial conditions ever since the financial crisis, there have been a few voices in the wilderness warning that we are setting ourselves up for a massive fall in the medium-term. The International Monetary Fund’s(IMF) October 2019 Global Financial Stability Report is one such voice of caution, telling investors there will be a hefty price to pay for the liquidity-fuelled binge. The IMF says that ultra-low and negative interest rates have led to a desperate search for yield among investors, leading to overvaluation of assets. Even conservative institutional investors such as pension funds have been investing in riskier and illiquid alternative assets, such as private equity, in order to increase returns.

Compelling valuations, strong growth make this construction company a good investment
A major beneficiary of consolidation in the construction space, this company has rapidly built a scalable competitive business. Today it’s a dominant player in the metro construction space with proven capabilities and has one of the best project-winning ratios in the industry. Moreover, its strategy of owning most of its equipment and not resorting to subcontracting has helped it develop strong competitive advantages. Today it enjoys one of the highest EBITDA margins in the industry (16.7 percent).

Q2FY20 review: Federal Bank
Federal Bank’s reported profits for the September quarter looked strong aided by lower taxes, but there were several areas of disappointment. While the tax bounty has been used to beef up provisions, and hence welcome, higher slippages from the corporate book, sharp decline in interest margin, rise in one-off costs and softer credit growth were the areas that took the sheen off the reported numbers. The stock has also underperformed both the benchmark Nifty and Bank Nifty in recent times and is a whisker away from its 52-week low price. Still, our in-house analyst believes that this weakness may be an opportunity to gradually build up a position for the long-run as the bank’s strategic intent inspires confidence.


Comments

Post a Comment

Popular posts from this blog

India Joins Russia in Voting Against West-Backed Move to Expand Powers of OPCW

The Wire: June 28, 2018 New Delhi: India voted against a UK-backed move that will allow the global chemical weapons watchdog to apportion blame for illegal attacks, criticising the decision to grant “unchecked powers” to the head of the group which could be used for “partisan” purposes. On Wednesday, more than two-thirds of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW) voted to authorise the international body to identify the perpetrators and sponsors of a chemical weapons attack. It also specifically called on the OPCW’s technical secretariat to begin work on identifying the perpetrators behind the use of chemical weapons in Syria. The draft decision, sponsored by 30 countries, was adopted at the fourth special session of the conference of the states parties to the Chemical Weapons Convention at the Hague, with 82 in favour and 24 negative votes. While Europe, the United States and their allies voted ‘yes’, there was strong oppo...
Read more

As financial insecurity rises in urban India, so does investment in insurance

Image
Scroll.in March 13, 2020 Urban Indians are becoming less confident about their financial security. Up to 58% of them fret over financial independence post retirement, which is a 4% increase from last year. An equal share of urban Indians worry about meeting their daily medical expenses and sustaining their current lifestyle once they stop working. The findings are part of a survey published by Delhi-based Max Life Insurance in association with London-based consultancy Kantar. The firms surveyed 7,014 respondents in 25 cities, including six metros, nine tier-1 cities, and 10 tier-2 cities, between December 2019 and January 2020. Source: Max Life Insurance via Quartz The trends Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz A significant share of urban Indians also say their families will have no financial support in the event of the breadwinner’s death. In such a scenario, around 57% believe the family sav...
Read more

ED tracks Swiss Bank A/Cs of Agusta scamster

The Poineer February 10,2019 Rakesh K Singh The Enforcement Directorate (ED) has tracked a dozen Swiss bank accounts in the name of Rajiv Saxena, who is key accused in the Rs 3,600 crore AgustaWestland VVIP chopper scam. The ED has also found out accounts held by  his family members and associates where the kickbacks in the now scrapped deal were allegedly parked. Two bank accounts are in the name of Rajiv Saxena’s  associates Pankaj Jain and Sumita Jain who are also the authorised signatories. The  third is in the name of another associate Ajit Singh Bubber, but Rajiv and his family members are authorised signatories. The remaining nine accounts are largely owned and operated by Rajiv, his family members and associates. Rajiv Saxena was deported by the UAE authorities on January 30 and the ED formally arrested him the next day and a court later granted his remand to the agency. He is currently undergoing custodial interrogation by the ED. The agency had in 2017...
Read more