Tuesday, July 19, 2016

The Monsoon Session 2016 | Except GST Bill

The Monsoon session is on the way and most of the parties are optimistic for the bill and so as the investors. Most of the conditions are fulfilled by the ruling party and opposition is looking much satisfied as well. Except GST Bill, another 21 bills are lined up and this time, experts are expecting them to get clearance as well.

Logistics industry is projected to grow at a compounded annual growth rate of 15-20 percent between 2015-16 and 2019-20 that will get a further boost if GST is rolled out from this year, which can trim costs by 20 percent, says a report. The much-delayed GST rollout can help boost the GDP by 100-200 bps as this will help faster and cheaper movement of goods across the country with a uniform taxation structure, said a report by Care Ratings.

Since GST will be levied on goods transportation and full credit will be available on interstate transactions, logistic cost is expected to come down by 1.5-2 percent of sales due to warehouse optimization and the resultant lower inventory cost. According to a recent World Bank report, corporates can save up to 40 percent of their logistic costs incurred at check-posts and toll plazas. According to the report, the higher growth of the logistic industry will be driven by e-commerce, GST rollout, government focus on local manufacturing, the new national integrated logistic policy, and 100 percent FDI in warehouses, food storage facilities etc. But in spite of large potential, the industry remains entangled in complexities such as higher costs, a myriad of complex tax structures. The logistic sector is primarily divided into four segments -- transportation, warehousing, freight forwarding and value-added logistics. The transportation contributes the lion's chunk of 60 percent of the logistic pie, followed by warehousing compromising industrial and agricultural storage at 24.5 percent.

Tuesday, July 12, 2016

Kotak Select Focus Fund Growth Five Year Performance

     Kotak Select Focus Fund - Regular Plan (G)

Five Year Performance
Investment Amount `1000/- month (SIP)

2011
2012
Month
Nav
Unit
Month
Nav
Unit
Jan
Jan
10.48
95.45
Feb
Feb
11.47
87.15
Mar
Mar
11.02
90.74
Apr
Apr
11.28
88.65
May
May
10.44
95.80
Jun
Jun
10.93
91.48
Jul
11.83
84.55
Jul
11.22
89.16
Aug
11.07
90.30
Aug
11.63
85.98
Sep
10.65
93.94
Sep
12.02
83.19
Oct
10.76
92.90
Oct
12.34
81.02
Nov
10.15
98.57
Nov
12.36
80.92
Dec
10.15
98.56
Dec
13.10
76.31
Total A
558.83
Total B
1045.87
2013
2014
Month
Nav
Unit
Month
Nav
Unit
Jan
13.59
73.60
Jan
13.90
71.94
Feb
12.89
77.59
Feb
13.75
72.71
Mar
12.60
79.37
Mar
14.63
68.34
Apr
12.17
82.15
Apr
15.10
66.22
May
13.29
75.26
May
16.49
60.64
Jun
12.36
80.89
Jun
17.84
56.04
Jul
12.81
78.08
Jul
18.15
55.09
Aug
11.88
84.20
Aug
18.85
53.06
Sep
12.60
79.40
Sep
20.17
49.59
Oct
13.36
74.86
Oct
19.37
51.62
Nov
13.63
73.39
Nov
21.79
45.89
Dec
13.69
73.07
Dec
21.59
46.31
Total C
931.85
Total D
697.45
2015
2016
Month
Nav
Unit
Month
Nav
Unit
Jan
22.98
43.52
Jan
21.29
46.97
Feb
23.58
42.41
Feb
20.64
48.45
Mar
23.46
42.63
Mar
21.62
46.26
Apr
23.49
42.57
Apr
22.82
43.82
May
22.64
44.18
May
22.87
43.73
Jun
22.40
44.65
Jun
23.81
42.00
Jul
23.88
41.88
Aug
24.30
41.16
Sep
22.57
44.30
Oct
23.45
42.65
Nov
22.54
44.36
Dec
22.60
44.24
Total E
518.53
Total F
271.22
Total unit (A+B+C+D+ E+ F)
4023.76
Current NAV as on 12.07.2016
25.01
Current Value
100638.25
Investment
60000.00
Appreciation
40638.25


Monday, July 11, 2016

Monsoon Update

Monsoon Update 

Monsoon progressed well during the week, with cumulative rainfall now 1% surplus of normal as compared to 25% deficit in the mid of June. Monsoon has now covered all major agricultural states. However, sowing is down 22% YoY, which is understandable given that Kharif season has been delayed by around 15 days. There has been a sharp drop in Cotton and Oilseeds sowing, as certain state governments including Maharashtra advised farmers against sowing Cotton till monsoon sets in.

The focus would now be on the progress of monsoon through July-August (around 60% of total South West monsoon), as rainfall was above-normal in June last monsoon also (CY15) but dwindled as the season progressed. However, both IMD and Skymet have forecast above-normal rains in July and August this monsoon. 

Saturday, July 9, 2016

Outlook June'16

The credit policy of June '16 was along expected lines with RBI staying on hold until further clarity emerges on monsoon and its impact on food prices. RBI has reaffirmed that the stance of monetary policy will remain accommodative. The expectations of strong monsoon, low MSP hikes for kharif crops of 2016-17, continued reforms by the government and higher public capital expenditure to augment supply side capacity forms the basis for our positive view on inflation going forward. Additionally, continuing fiscal consolidation, and low current account deficit are also supportive of lower yields.

Source for various data points: RBI Website, Bloomberg and Reuters.

Saturday, July 2, 2016

Pay hikes to boost retail loan growth by 17-20%: SBI VG Kannan, Managing Director, SBI

Pay hikes to boost retail loan growth by 17-20%: SBI 
VG Kannan, Managing Director, SBI
30th June 2016; CNBC-TV18
·           Discussing the stressed asset situation, Kannan told CNBC-TV18 that the worst is probably over. However, it does not mean that all bad news is done for. With monsoon playing well and implementation of 7th Pay Commission, growth trajectory is coming back in the economy, he says. Pay hikes will boost retail consumption and housing sector both. Kannan expects SBI's retail growth to be in the range of 17-20 percent on back of pay hikes. While there is also a possibility of a jump in inflation, it will not be substantial.
·           SBI has always been raising this foreign country funds overseas at regular intervals. We are raising from half a billion to USD 1.5 billion over the last so many years and this is one of the regular fund raising activities to enable our foreign offices to fund the assets. The exact timing will be decided and we are looking at the various global scenarios and the Brexit scenario also. May be certain advantages also because we do expect good pricing -- the exact timing is not yet decided. It will be decided in due course.
·           We have been expecting around 17-20 percent growth at the worst scenario because this is directly a retail demand that is likely to come up. Therefore, 17-18 percent or even 20 percent could not be ruled out.
·           I would say that probably the worst is over and I won't say any bad news is not there but the worst is possibly over. We expect now the monsoon also playing out very well, I think the future should be much better than what we had in the past.
·           I should see a good pick up in the retail especially in the housing as also in the retail and that should act as a boost to the economy. So there are certain positives to it. Overall, we expect there should be improvement in demand therefore add to the growth of the Indian economy.
·           Give us an update on the SBI merger, the last time we spoke you guys mentioned to us that by end of FY17 it would be completed, just wanted to know when you would be sending the merger plan to the government and just a status check on that? A: It is work in progress. We are on schedule.


Reforms focus, corporate topline will keep India growth story intact

Reforms focus, corporate topline will keep India growth story intact
Sonjoy Chatterjee, Goldman Sachs
30h Jun 2016 |Source: Economic Times
  • On reforms: In the corporate sector, it's visible through the winners, who are the survivors, versus those who are struggling to make the cut in this revised business paradigm shift. It is unfolding as we speak and a great deal more will take place in the next few years. The shift is visible across the whole spectrum of financial sector reform, such as the bankruptcy law and the push by the RBI governor to tackle the bad loan issue head on--basically the decision to call a spade a spade. These reforms are linked to the same overall governance shift that is being driven by the Prime Minister and the finance minister. This period of change will no doubt be marked by some amount of challenge, any transition always is... but in the end, the banks will ride this through and our financial and corporate sectors will come out much stronger and in a better place than we are in now. The shift will set the theme for a very robust growth trajectory for our country.

  • View Rajan's departure: his departure announcement has created some uncertainty around the policy stance on liquidity and interest rates, asset quality and lending structure. At the end of the day though, overall impact will be limited as India's current macroeconomic fundamentals stand better than most of the emerging markets. The growth story will continue to remain intact with the government's unwavering focus on reforms and improvement in the top line of corporates suggesting a better operating environment. 

  • Overall, as a firm, do you remain very bullish on India? Across our businesses, whether it is corporate finance (mergers and acquisitions and equity capital markets), equities brokerage and our principal investing arms -which include Goldman Sachs's merchant banking division, special situations and principal strategic investments group, who invest in fintech startups -weare very, very active. Of all the Asian countries, India is one of the markets where we have and continue to be most active, when it comes to investing. As a whole we have invested approximately $2.5 billion of capital in India since 2008.

  • As an investor in Indian equities, we also continue to be very active through our global funds. Our India-specific investing fund in equities has an approximate AUM (assets under management) of $1.7 billion. About two years ago, it used to hover around $200 million. That is again a function of how much India has changed in the eyes of global investors who ask us to manage their capital.

  • Implications of Brexit for India? As a region and specific to India, the fundamental linkage between Asia and the UK or Europe is moderate. While these linkages are moderate, our equity strategists believe there could be short-term market impact from negative sentiment and risk aversion. We could also likely see a generally negative impact from FX. That having been said, Brexit is a historic event, but not a systemic one.