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Sensex slips below 34,000 level, down 131 pts in early trade


Mumbai: The benchmark BSE Sensex slipped below the 34,000-mark by falling nearly 131 points in early trade today, extending Friday’s losses as investors cut bets amid weak domestic sentiment and absence of Asian cues. The 30-share barometer dropped by 130.54 points, or 0.38 per cent, to 33,880.22 in early trade led by fall in Tata Steel, SBI, Reliance Industries and L&T.

The gauge had lost 286.71 points in the previous on Friday. The Nifty50 index also fell 47.40 points, or 0.45 per cent, at 10,404.90.

Brokers said investors trimmed positions on distinctly weak sentiment since the detection of a massive Rs 11,400-crore fraud at state-run Punjab National Bank (PNB). Shares PNB remained under selling pressure and lost another 5.25 per cent.


Other laggards were Tata Steel, SBI, L&T, IndusInd Bank, Adani Ports, M&M, Hindustan Unilever, Bharti Airtel, Asian Paint, Bajaj Auto, Yes Bank, ONGC, Coal India and Reliance Industries, falling up to 3.22 per cent. Meanwhile, foreign portfolio investors (FPIs) continued selling on domestic bourses. On net basis, they sold shares worth Rs 1,065.99 crore, while domestic institutional investors (DIIs) made purchases to the tune of Rs 1,127.78 crore on Friday, provisional data showed.

Globally, in the Asian region, Japan’s Nikkei rose 1.33 per cent, while markets in Hong Kong and China remained shut today on account of a public holiday. The US Dow Jones Industrial Average ended 0.08 per cent higher on Friday.




Big wilful defaulters owe PNB Rs 14.6k cr


Outstanding rises 23% in eight months, Forever Precious top defaulter

New Delhi : State-owned Punjab National Bank (PNB), which is reeling under a Rs 11,400 crore fraud, has witnessed nearly 23 per cent jump in the amount which wilful defaulters owe it, with loan outstanding of Rs 25 lakh and above, in just over eight months ended January.

The wilful defaulters who have taken loans over Rs 25 lakh from the bank had a gross outstanding against them of Rs 14,593.16 crore as on January 31, 2018, as per PNB data. The bank first started giving out such data from June 2017, when the gross loan outstanding against them was at Rs 11,879.74 crore.


The amount has grown over 22.8 per cent in these eight months. The rise in such outstanding is startling, especially when the bank has been aggressive for over a year now in recovering bad loans.

The 123-year-old bank has unearthed Rs 11,400 crore fraud allegedly involving billionaire jeweller Nirav Modi and associate companies. The fraud pertains to issuance of fake Letters of Understanding (LoUs) to companies associated with Modi by errant PNB employees that enabled these companies to raise buyers credit from international branches of other Indian lenders.

The list of wilful defaulters with over Rs 25 lakh loan as on January 31, 2018 include Rs 747.97 crore against Forever Precious Jewellery & Diamonds; Rs 597.44 crore against Kingfisher Airlines; Rs 410.18 crore against Zoom Developers and Rs 266.17 crore against MBS Jewellers Pvt Ltd among others.

PNB CMD Sunil Mehta said last week that the bank would take all the legal action to bring the perpetrators to the books and that it will also honour all its bonafide commitments.

PNB has been putting out the list of wilful defaulters since June 2013 which it continued till May 31, 2017. Since then it is only listing out those wilful defaulters with outstanding of Rs 25 lakh and above with their names/proprietorship from June last 2017. Bank’s net non-performing assets (NPAs) or bad loans fell to Rs 34,076 crore at the end of third quarter ended December of the current fiscal, from Rs 34,994 crore at end-December, 2016. Gross NPAs were up however at Rs 57,519 crore as on December 31, 2017 as against Rs 55,628 crore by the same period of previous fiscal.

In terms of ratio, the net NPAs fell to 7.55 per cent of the net advances by end of third fiscal 2017-18 from 9.09 per cent in the year ago same quarter. Gross NPAs were 12.11 per cent, as against 13.70 per cent.

Post the third quarter earnings announcement on February 6, Mehta said he hoped to see good recoveries in bad loans in the last quarter ending March 2018.

Industry body calls for privatisation

New Delhi : The fraudulent transactions of Rs 11,400 crore detected at Punjab National Bank (PNB) should act as a strong trigger for the government to reduce its stake to less than 50 per cent in public sector banks (PSBs), industry body Assocham said on Sunday.

It argued that PSBs should then be allowed to function on the lines of private sector lenders with a full sense of accountability to their shareholders, protecting the interest of depositors.

The $1.77 billion (about Rs 11,400 crore) scam in PNB involves billionaire jeweller Nirav Modi allegedly acquiring fraudulent letters of undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders.

“The PSU banks, ironically, are slipping from one crisis to the other and there is a limit the government can keep bailing them out at the cost of taxpayers’ money, even if it is the principal shareholder in these lenders,” Assocham said. It claimed that top banking positions are treated as extension of a government job and the senior most managements spend bulk of their quality time, receiving and implementing directions from the bureaucrats even for innocuous issues.

“In the process, the core banking functions, including all important risk mitigation and management, take a back seat,” it said.




Know these 5 things before investing in mutual funds via SIP


Mutual funds today are everywhere, be it on TV, newspaper or various places on the internet. There is a good chance that every time you hear about mutual funds, it is followed by a powerful three-lettered abbreviation, SIP, “S – Systematic, I – Investment, P – Plan”.

SIP is simply a directive given to the fund house, to periodically invest in a scheme by deducting money from your bank account. For instance, if you start a SIP with fund house and decide to invest Rs 5000 on the 1st of every month, you are authorising that fund house to deduct Rs 5000 every month from your bank account to invest in the SIP scheme with the price (NAV) applicable as of 1st of that month.

Most of the times we don’t bother to think about things that matter over the long term, like investments and retirement planning. SIP investment basically takes care of this human inertia. That’s right. So, if you are planning to make SIP investment, it is essential to know some vital things before investing. Here are some points to consider:


Know the Companies in which the SIP Invests
Every systematic investment plan invests its funds into a group of companies from different sectors. So, as an investor, you must check the profile of the companies picked by the fund house. Understand their performance over the past few years along with considering any news related to the firms, their financials, and future prospects.

Understand your Risk Appetite
When you are sure about your financial goal, you must also be confident about the level of risk you are ready to take to achieve that goal. An investor can be either a conservative, moderate or an aggressive investor. Know which type of investor you are before investing in mutual funds via SIP.

If you are a conservative investor, investing in large-cap funds can be your ideal choice. Such funds mostly include big companies that are considered safe to invest because they are likely to be well-established players in their respective filed. If you are a moderate investor, then large cap and multi-cap schemes (also known as diversified equity) are the best options for you.

For aggressive investors, midcap and small-cap schemes, which are commonly known as high returns-high risks schemes, are the best choice.

Know the Fund House
A fund house is the heart of your SIP investing experience and performance of the scheme. When you invest in a scheme, you are primarily giving it the mandate to manage the money on our behalf. Hence, selecting the right fund house is essential as various fund houses are specialising in different asset classes and their scheme performance differs significantly.

Your fund selection process must focus on management quality, experience and investment philosophy. Understand their investment processes, risk measures and operational efficiency. You can get a good idea of fund house by visiting their websites, reading basic details in scheme documents or accessing online research reports.

Understand the SIP Instalment Lock-in Period
In case of a SIP in ELSS mutual funds, very often a delusion exists that, the entire investment can be withdrawn once the lock-in period of 3 years is over. But that’s not true!

The fact is that your every instalment of SIP must complete the lock-in tenure. So, let’s say if you put in Rs 5,000 through SIP in January 2018, the lock-in period for this one instalment will get over in January 2021. Similarly, other SIP instalments need to complete 3 years lock-in as well.

However, if you are investing in an open-ended mutual fund, there will be no lock-in period for your SIP as well.

Understand the Tax impact on SIP Returns
The tax impact entirely depends on the type of mutual fund you invest in and when you redeem your investment.

For example, returns from equity mutual funds have no tax on them if redeemed after a year of investment. However, if redeemed before a year, you will have to pay a tax of 15% on your gains.

On the other hand, debt mutual funds, are subjected to 20% tax rate with indexation benefit if redeemed after 3 years since investment. But if you redeem before 3 years, the tax will be based on your income tax slab.

Also, if you use SIP to invest in tax saving ELSS mutual funds, you can claim tax deductions up to Rs 1.5 lakh under Section 80C of Income Tax Act.

Conclusion:

Simply put, SIP investment is nothing but an automated mode of investment to avoid human inertia. To get better returns, you still need to research and periodically check the health of your portfolio.

In the end, investing in mutual funds via SIP is all about discipline and the time spent. Once, you have mastered these two, along with compounding, mutual funds can surely help you tide over any financial blues and reach your goals.




Sensex at new high, Nifty breaches 11,000 mark


Mumbai: The NSE Nifty today crossed the historical 11,000 level for the first time while the BSE Sensex hit another record high of 35,957.99 in opening trade after a rally in metal, oil & gas and IT stocks. Uninterrupted foreign fund inflows amid strong corporate earnings and positive global leads drove the benchmark indices to fresh lifetime highs. The 50-issue Nifty breached the historic 11,000 level by gaining 56.80 points, or 0.51 per cent, to trade at all-time high of 11,023.00. It bettered its previous intra-day high of10,975.10 touched yesterday.

The flagship BSE Sensex too surged 159.98 points, or0.44 per cent, to trade at a new record high of 35,957.99, breaking its previous record high of 35,827.70 reached in yesterday’s trade. The gauge rallied 1,026.99 points in the previous four record-setting sessions. Trading sentiment remained extremely bullish backed by sustained capital inflows by foreign funds and widespread buying by retail investors, driven by strong earnings by some more bluechip companies that helped key indices to scale new peaks, brokers said.

Moreover, record closing on Wall Street as lawmakers agreed on a budget deal to reopen the US government and a firming trend at other Asian markets too bolstered trading sentiments here, they added.


The best performers during initial trade were Axis Bank, Infosys, Reliance Industries, ONGC, Coal India, Tata Steel, Yes Bank, Bajaj Auto, SBI, ICICI Bank, Dr Reddy’s, Kotak Bank, HDFC Ltd, and Hero MotoCorp with gains of up to 2.16 percent. Among other Asian markets, Hong Kong’s Hang Seng index was up 0.88 per, Japan’s Nikkei rose 0.93 per cent, whileShanghai Composite Index gained 0.70 per cent in their early deals.    The US Dow Jones Industrial Average ended at new high in yesterday’s trade, by rising 0.55 per cent.




India lags behind Pakistan in WEF Inclusive Development Index


Davos: India has been ranked 62nd among emerging economies on an Inclusive Development Index, much below China’s 26th position and Pakistan’s 47th. Norway remains the world’s most inclusive advanced economy, while Lithuania again tops the list of emerging economies, the World Economic Forum said while releasing the yearly index before the start of its annual meeting.

The index takes into account the “living standards, environmental sustainability and protection of future generations from further indebtedness”, the WEF said. It urged the leaders to urgently move to a new model of inclusive growth and development, saying reliance on GDP as a measure of economic achievement is fuelling short-termism and inequality. India was ranked 60th among 79 developing econo-mies last year, as against China’s 15th and Pakistan’s 52nd position.

The 2018 index, which measures progress of 103 economies on three individual pillars — growth and development; inclusion; and inter-generational equity — has been divided into two parts. The first part covers 29 advanced economies and the second 74 emerging economies.


India everywhere at Davos, from billboards to platters
The index has also classified the countries into five sub-categories in terms of the five-year trend of their overall Inclusive Development Growth score — receding, slowly receding, stable, slowly advancing and advancing. Despite its low overall score, India is among the ten emerging economies with ‘advancing’ trend. Only two advanced economies have shown ‘advancing’ trend. Among advanced economies, Norway is followed by Ireland, Luxembourg, Switzerland and Denmark in the top five.

Small European economies dominate the top of the index, with Australia (9), the only non-European economy, in the top 10. Of the G7 economies, Germany (12) ranks the highest. It is followed by Canada (17), France (18), the UK (21), the US (23), Japan (24) and Italy (27). The top-five most inclusive emerging economies are Lithuania, Hungary, Azerbaijan, Latvia and Poland.

Performance is mixed among BRICS economies, with the Russian Federation ranking 19th, followed by China (26), Brazil (37), India (62) and South Africa (69). Of the three pillars that make up the index, India ranks 72nd for inclusion, 66th for growth and development and 44th for inter-generational equity. The neighbouring countries ranked above India include Sri Lanka (40), Bangladesh (34) and Nepal (22). The countries ranked better than India also include Mali, Uganda, Rwanda, Burundi, Ghana, Ukraine, Serbia, Philippines, Indonesia, Iran, Macedonia, Mexico, Thailand and Malaysia.




Arun Jaitley chairs Pre-Budget meeting with Finance Ministers of all states and Union Territories


New Delhi: Union Finance Minister Arun Jaitley on Thursday chaired the pre-budget meeting with finance ministers of all the states and Union Territories here.

In the pre-budget consultations, Jaitley will hear the state ministers expectations from the Union Budget.

The Union Budget, the last one during this tenure of the Bharatiya Janata Party-led National Democratic Alliance (NDA) government, will be presented on February 1.


The budget session will begin on January 29. The fifth budget comes just a year ahead of the 17th general election.




Sensex hits another peak of 35,476.70; Nifty at 10,887.10


Mumbai: The BSE Sensex continued its record-setting spree for a second day, scaling a new high of35,476.70 in opening trade today as banking stocks led rally on sustained foreign fund inflows. Also, the broader NSE Nifty zoomed to a new high of10,887.10. The 30-share index rallied by 394.88 points, or 1.12 percent, to hit the peak of 35,476.70, breaching its previous intra-day high of 35,118.61 hit yesterday.

Foreign investors put in Rs 625.13 crore in stocks on net basis yesterday, while domestic institutional investors bought shares worth Rs 168.61 crore, provisional data showed. All the sectoral indices, led by banking, FMCG and capital goods were trading in the positive zone with gains up to 1.92 percent. The 50-share NSE Nifty gained 98.55 points, or 0.91 percent, to trade at lifetime high of 10,887.10. The gauge had touched an intra-day high of 10,803 in yesterday’s trade. In the banking space, Yes Bank, IndusInd Bank, SBI, AxisBank, Kotak Bank, ICICI Bank and HDFC Bank were prominent gainers.

Stocks of Hindustan Unilever were up by 0.81 percent toRs 1,382.95 after the company posted better-than-expected earnings yesterday. Hero MotoCorp, M&M, L&T, Dr Reddy’s, ITC Ltd, Bajaj Auto, ONGC and Sun Pharma were the other gainers during initial trade. Brokers said continued buying by foreign funds as well as retail investors after the government’s decision to slash its additional borrowing requirement for the current fiscal to Rs20,000 crore from Rs 50,000 crore, estimated earlier and encouraging Q3 earnings by some bluechip companies lifted the key indices to new highs.


Besides, a firm trend in the global markets also boosted sentiments, they said.  Among other Asian markets, Hong Kong’s Hang Seng gained0.41 percent, while Japan’s Nikkei rose 0.46 percent in early trade today. Shanghai Composite Index rose 0.32 percent. The US Dow Jones Industrial Average closed 1.25 percent higher in yesterday’s trade.




Government cuts borrowing target, says Rs 20,000 crore is enough


New Delhi: The government on Wednesday said it has cut the size of additional borrowing to Rs 20,000 crore of government securities during the current fiscal.  On December 27, the government had stated that it would raise additional market borrowing of Rs 50,000 crore through dated government securities in 2017-18.

“Upon a review of trends of revenue receipts and expenditure pattern, it has been assessed that additional borrowing of only Rs 20,000 crore of government securities would be adequate to meet financing needs,” an official statement from the Finance Ministry said.  “Government did not accept borrowings of Rs 15,000 crore in last three auctions. Remaining Rs 15,000 crore would be reduced from the notified borrowing programme of ensuing weeks,” it added.




Delhi government invites suggestions for excise policy for 2018-19


New Delhi: The Delhi government has sought suggestions from all stakeholders to formulate a new excise policy for the next financial year. The Excise Department has issued a public notice and asked stakeholders to submit their suggestions within 15 days. A government official said the suggestions can be submitted through email at dcexcise@nic.in or a hardcopy of the same can be given to the deputy commissioner’s office.

“The department has initiated the process for formulation of Excise Policy for the year 2018-19. Therefore, the stakeholders may submit their suggestions in respect of the ensuing Excise Policy to this office, within 15 days,” the department said in the notice.

Earlier this month, the Delhi Cabinet had approved excise policy for the ongoing financial year 2017-18 although it was supposed to be approved earlier. This excise policy will be effective from January next year. Under the recently introduced policy, the Aam Aadmi Party government had decided not to hike the excise duty on liquor. This was the third time the Arvind Kejriwal government did not increase the excise duty on liquor, resulting in no hike in the prices of alcohol.




RCom deal brings synergies for Jio’s biz: Morgan Stanley


New Delhi : The acquisition of wireless assets of Reliance Communications (RCom) will lower costs and bring synergies to Reliance Jio’s business but may potentially raise parent RIL’s net debt by 10-12 per cent in near term, Morgan Stanley said on Friday.

The two companies, last evening, announced a blockbuster deal under which Mukesh Ambani’s Jio said it will acquire debt-laden RCom’s wireless assets — including spectrum, tower and the optical fibre network — for a widely-estimated Rs 24,000 crore to Rs 25,000 crore.

The deal, for which a binding agreement has been signed by the two companies, is expected to be completed in a phased manner between January and March 2018. “Acquisition of RCom’s telecom infrastructure should bring synergies and lower costs while raising clarity on growth capex. The deal could potentially raise balance sheet leverage by 10-12 per cent near term,” global financial services major Morgan Stanley (MS) said in a note, reports the PTI.


On the flip side, it may “raise RIL’s net debt by about 10-12 per cent and likely be EPS (Earnings per share) dilutive by 1-3 per cent” on its FY 2019-20 estimates. Morgan Stanley noted that Reliance Industries (RIL) will save on tower rentals, being one of the largest tenants for RCom’s towers and paying Rs 1,500-1,600 crore in annual rental, as per its estimates. “RCom, during its June 7, 2013 press release on tower sharing with RIL, had highlighted Rs 120 billion (Rs 12,000 crore) as the agreement value over the lifetime of the deal,” it pointed out. Investment banking firm Jefferies, however, felt that the upside from the deal could be limited unless Reliance pays “much less than” the estimated fair value of Rs 24,000-29,000 crore. “Timing is uncertain and the deal value unknown but unless Reliance pays much less than the Rs 240-290 billion we estimate as their fair value, upside may be limited, especially as it already has access to the towers/fibre at favourable terms,” Jefferies said, terming the risk-reward as being unfavourable. It cautioned that although RCom expects the deal to conclude in first quarter of calender 2018, “it has slipped on such timelines before”. “It could yet again, with the deal contingent, among others, on approvals from the government, regulators, lenders…It may be a complex process…,” it added.

The industry has also given the deal a thumbs-up, and the COAI DG, Rajan Mathews, speaking to the PTI, said: “It is good for the industry because the industry continues to consolidate around serious players who have deep pockets and financial wherewithal to play effectively and delivery value to customers in future.”




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