Current Stock Market scenario

Current Stock Market scenario and your response as investor.

1. It's an unprecedented fall irrespective of index stock or mid cap or small cap.

2. Time has come to review your portfolio and restrict your holding to 6 to 8 sectors and 15 to 20 stocks with the advice  of your Financial Advisor

3. Value of portfolio of the majority of the investors have eroded by 40%.

4. Don't panic, do you need this money to spend now for immediate consumption? Definitely not.

5.Stock prices are below their  intrinsic value and cheap.Some stocks are  fundamentally strong and point of reversal is imminent.

6. Look out for ZERO debt securities with good governance, no pledge by promoters, when you recast your portfolio.

7. You can invest at least 30% to 40 %  depending upon your Risk Appetite at this juncture. Even if another downfall occurs sanity is bound to return.

8. India has voluntarily gone for many structural changes like Demonetization,GST ,IBC RERA etc. and hence it has hit our GDP number. But the foundation is solid for take off.

9. With good harvest of Rabi Crop rural spending will pick up plus government is expected to come out with some rescue package to boost spending.

10. Do your research, look out for good companies in  Pharma , FMCG ,Cement and Banking/NBFC.

11. FPI's who had redemption pressure have taken exit from Emerging Markets and they are bound to return value stocks

12. No asset class be it, Gold Fixed Income or Real Estate can fetch you the returns. Interest rates are heading downwards.  Cheap interest rates are bound to push Capital expenditure. Equity can offer you in coming two to three years.

HAPPY INVESTING IN THE NEW YEAR.

 P V Bhagwat Investment Guidance Cell Committee

Lokmanya Seva Sangh , Parle.

FINANCE FAIR 2017

Investor should be King 

On Saturday 11^th March & Sunday 12^th March 2017

Capital Protection Schemes offered by Mutual Funds

  

1. What are capital protection oriented schemes?

Capital Protection Oriented Schemes (CPOS) from mutual funds are closeended schemes with a tenure of three to five years and are low risk products. Typically, they are hybrid schemes with majority of the portfolio invested in debt/ money market instruments and the balance in equity and equity-related instruments. These schemes are oriented towards capital protection and do not offer guaranteed returns. The orientation towards protection of the capital originates from the portfolio structure of the scheme.

2. How will capital protection work in a mutual fund? 

In such a scheme, the allocation to debt instruments is done in such a way that at the end of the term of CPOS, the value of the investment grows to the original investment in the fund. The equity portion aims to add to the returns of CPOS at maturity. The equity component is generally invested in equities for capital appreciation. The debt portion is invested in commercial papers, certificates of deposits, bonds and nonconvertible debentures that will mature along with the maturity of the fund. Assuming the scheme invests approximately 80 per cent of your capital of say `100 in highest rated debt and money market instruments. The debt portfolio will grow over the tenure of the scheme to 100 per cent, thereby protecting your capital. The remaining 20 per cent will be invested in equities or futures and options strategies. So at the end of the tenure, the debt portion appreciates to `100 and the equity portion appreciates to Rs 40, the investor will get Rs 140 back. In case the equity portion, dips to Rs 10, the investor would get Rs 110 back. In both the cases, the capital of Rs 100 is protected.

3. Who can invest in capital protection schemes?

These schemes are suitable for various types of investors. Typically investors who want equity exposure with stability in the portfolio being provided by the debt portion of the portfolio. Investors with a low risk appetite, and who do not want to take interest rate risk and want to earn prevailing yields over the tenure of the scheme. Finally, investors whose investment horizon matches with the tenure of CPOS.

4. Can an investor redeem units of CPOS before its maturity?

As these are close-ended schemes which mature at a predetermined date, investors cannot redeem the units before maturity. from the fund house However, the units are also listed on the stock exchange and the only redemption option available is a sale on the exchange.

Bill for bankruptcy law

The bill seeks to consolidate and amend the laws relating to reorganization and insolvency resolution and will also apply to partnership firms and individuals. 

The bill is a money bill, implying that Rajya Sabha will have a limited role in it, brightening its chances of passage. 

Bankruptcy bill provides for creation of an Insolvency and Bankruptcy Fund, an Insolvency and Bankruptcy Board of India to regulate insolvency professional, agencies and information utilities. 

The code allows a corporate debtor itself to initiate insolvency resolution process once it has defaulted on a debt. 

The code provides for time limit of 180, days extendable by further 90 days, for completion of insolvency resolution process 

Financial creditors can also initiate corporate insolvency resolution process. 

The cumbersome insolvency resolution is one of key reasons for India's low ranking of 130 on the World Bank's Ease of doing business ranking. India is currently ranked at 136 on this measure in the 189-country ranking. Resolving a bankruptcy case can take on an average over four years in India. The government is keen to address this through a specific law to resolve insolvency. 

Read more at:
http://economictimes.indiatimes.com/articleshow/50265232.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Credit Information Bureau (India) Limited (CIBIL)

Credit Information Bureau (India) Limited is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards. These records are submitted to CIBIL by member banks and credit institutions, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to credit institutions in order to help evaluate and approve loan applications. CIBIL was created to play a critical role in India’s financial system, helping loan providers manage their business and helping consumers secure credit quicker and on better terms.

CIBIL collects and maintains records of an individual‘s payments pertaining to loans and credit cards. These records are submitted to CIBIL by banks and other lenders, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to lenders in order to help evaluate and approve loan applications.

Since, the credit score and CIR not only helps loan providers identify consumers who are likely to be able to pay back their loans, but also helps them to do this more quickly and economically. This translates into faster loan approvals.

Until recently, there was little visibility and transparency with regards to the loan approval process and the elements that loan providers used to evaluate your loan application. Since, CIBIL has made your credit score and CIR available to you, you will be able to see how valuable a customer you are to loan providers.

CIBIL empowers both loan providers and individuals to see their world more clearly and hence, take better and more informed decisions.

For credit grantors to gain a complete picture of the payment history of a credit applicant, they must be able to gain access to the applicant's complete credit record that may be spread over different institutions. CIBIL collects commercial and consumer credit-related data and collates such data to create and distribute credit reports to its Members which are credit institutions and banks in India. CIBIL’s over 1300 strong member base includes all leading public & private sector banks, financial institutions, non-banking financial companies and housing finance companies.

CIBIL’s products, especially the Credit Information Report (CIR) and CIBIL TransUnion Score are very important in the loan approval process. Once the loan provider has decided which set of loan applicants to evaluate, it analyzes the CIR / Score in order to determine the applicant’s eligibility. Eligibility basically means the applicants ability to take additional debt and repay additional outflows given their current commitments. Post completion of these first 2 steps the loan provider will request for the applicants income proof and other relevant documents in order to finally sanction the loan.

The CIR and Credit Score not only help loan providers identify consumers who are likely to be able to pay back their loans, but also help them to do this more quickly and economically. This translates into faster loan approvals for consumers. An individual with a credit score above 750 has better bargaining power with the lenders, since he is perceived as a responsible borrower. Since consumers can now access their Credit Scores and CIRs directly from CIBIL at the cost of INR 500, they can see for themselves how they are perceived by the lenders before applying for a loan. Hence, CIBIL empowers both loan providers and individuals to see their financial and credit history more clearly and hence, take better and more informed decisions.

CIBIL is ISO 27001:2005 certified- the most recognized security standard in the world. CIBIL is one of the 1000 companies in the world, which have achieved ISO 27001 certification, and one of the first few in India.

DigiLocker

https://digitallocker.gov.in/

What is DigiLocker?

Dedicated personal storage space, linked to each resident’s Aadhaar number. DigiLocker can be used to securely store e-documents as well as store Uniform Resource Identifier (URI) link of e-documents issued by various issuer departments. The e-Sign facility provided as part of DigiLocker system can be used to digitally sign e-documents.

How does DigiLocker work?

To Sign-up for the DigiLocker you need to have an Aadhaar and mobile number registered with Aadhaar. Type your Aadhaar number and the captcha code. After clicking signup button, an OTP (One Time Password) will be sent to the registered mobile number and email-id. Enter OTP and click on “Validate OTP” button to complete the sign up and login.

How is DigiLocker going to help me?

It will minimize the use of physical documents and will provide authenticity of the e-documents It will provide secure access to Govt. issued documents. It will also reduce administrative overhead of Govt. departments and agencies and make it easy for the residents to receive services.

Send your queries to :support@digitallocker.gov.in

Investor Protection

Ms. Nisha Subhash (Chartered Accountant, Sr. AVP, National Stock Exchange)  gave comparision of markets 25 years back & situation today. From regional & fragmented market to one market with access to investor across India. Settlement cycles were reduced. From physical trading to Online screen based trading. 

Guaranteed settlement due to precautions built into the system. E-mail/SMS to all investor for trade verification, Investor complaint redressal and Arbitration mechanism  

Ms. Nisha Subhash suggested Investing early, and only through authorized brokers. Analyse & Invest. Choose companies with strong fundamentals, & do not invest based on rumors. Review investment over a period of time and apply correction like getting rid of poorly performing asset.

Investor Protection – Indian Security Market

Mr. Rajesh Doshi Compared the scenario in Indian Security market Pre NSE & post NSE. NSE established in 1994, started online trading platform with satellite communication technology, set up the first depository in the country, & played key role in introduction of derivatives market in India. 

Indian Capital markets were made world class in terms of transparency, efficiency and safety.

NSE focused on Investors & trained them through seminars, publications, Education through NCFM etc. Mr. Doshi also enumerated 7 mantras of Investing like Start early investing, diversification of Investment, analyzing & investing, monitoring regularly etc.

Mr. Rajesh Doshi emphasized that choose only SEBI registered brokers while investing to avoid frauds & cheating.

Mr. Rajesh Doshi concluded by saying one must also know the rights & responsibilities of investors & utilize the NSE and Investor service in the event of a dispute investor’s complaint.