Posted at 4:56 PM , on November 11, 2019
In the last few months, there have been strident calls for the government to intervene and sort out the DHFL mess. The problem is more than a year old. At one time, DHFL was considered the most aggressive home finance company although its valuations were always at a discount to the big names. Problems at DHFL started when IL&FS began to default in the middle of 2018. This not only led to bad investments for DHFL but it spiked the cost of funds for most NBFCs. The sharp spike in bond yields gave a clear indicate that default was a real possibility.
Posted at 4:53 PM , on November 11, 2019
Discount broking has grown rapidly in the last few years and has been helped along the way by better technology, improved bandwidth and the rise of mobile app usage. Most investors are now seeing the advantage of keeping advice and execution separate and pay the broker only for execution. As alpha is increasingly becoming difficult, most investors are realizing the importance of saving on trading costs more than anything else. It is in this market that Bajaj Finserv has made a big entry into discount broking.
Posted at 4:01 PM , on November 11, 2019
Rating agency, Moody’s, downgraded the outlook for the Indian economy from stable to negative. It needs to be recollected that back in 2017, Moody’s was the only global rating agency to upgrade India’s rating. At that time, S&P and Fitch had refused to upgrade the ratings due to concerns over the fiscal deficit and the overall debt levels. Now, the agency has maintained the ratings at Baa2 but has downgraded the outlook to negative. What does this mean for the Indian economy?
Posted at 2:27 PM , on November 4, 2019
For a long time, Indians believed that debt was the best choice for gentlemen. Bonds rarely defaulted and bond funds were considered to be blue chips in the real sense of the term. Things changed substantially after bonds issued by IL&FS, Essel Group, DHFL and ADAG group defaulted in the last one year. Even investors who were holding bond FMPs felt short-changed after AMCs like HDFC, Birla and Kotak postponed their FMP repayments due to default in repayment by the Essel group. This has largely dented customer trust in bond funds and that is visible in the outflows in credit risk funds. One solution to this problem could be bond ETFs.
Posted at 2:23 PM , on November 4, 2019
Earlier this week, the Supreme Court bowled an absolute twister authorizing the government to collect unpaid AGC and other charges of Rs.92,000 crore. Most of these payments had to do with an old dispute between the DOT and the telecom companies. The dispute was whether government was entitled to a share of the non-core revenues or only the core revenues. The SC order puts that debate to rest. Telecoms need to give the government a share of their non-core revenues along with the penal amount and interest, which is what amounts to Rs.92,000 crore.