Posted at 10:29 AM , on February 18, 2020
When Budget 2020 shifted the onus of taxation from DDT to the investors, one of the big worry was for the REITs. As per the new rules, investors in REITs and INVITs will also have to pay tax on dividends at their peak rates, making it a virtual non-starter.
REITs are just too young
REITs are equivalent to realty mutual funds that invest in a portfolio of realty assets and pass on benefits to the investors. Currently, Indian REITs can only invest in commercial properties. However, it did offer a good source of diversifying investment risk since it was a portfolio of diverse properties and also it did not move in tandem with equities and bonds. That was the key.
Posted at 4:40 PM , on February 17, 2020
CPI Inflation for the month of Jan-20 came in at a 68-month high of 7.59%. This was largely driven by food inflation but core inflation has also chipped in with its own contribution. That could be something for the RBI to be cautious.
Double whammy on inflation
If you look at the inflation number for Jan-20, then it is up to the highest level in nearly 6 years. This is despite the fact that food inflation has come down marginally compared to December. Then why is CPI inflation higher? Firstly, fuel inflation has inched up during the month of January. Secondly, the core inflation (non-oil and non-food) has also inched up during the month of Jan-20. In the last few months, it was only food inflation but now core inflation is also proving to be a worry for the RBI. That could be the double whammy!
Posted at 11:23 AM , on January 27, 2020
The telecom troubles are far from over and nothing really happened on the 23rd January, which was the deadline for AGR payments. The DOT has asked the courts to be lenient with the telecom firms but the telecom story is gradually becoming a case of the theater of the absurd. Here is why:
What happens to Vodafone?
The single largest AGR liability is on Vodafone as it needs to shell out Rs.53,000 crore. The amount is disputed and Vodafone has accepted only Rs.44,000 crore, but that is still a big amount. There is no way Vodafone can afford to pay that kind of money and stay solvent. It is time to bite the bullet. The DOT either gives them deferred payment options or the government must be willing for the insolvency of Vodafone Idea. That will be a big hit!! Continue reading
Posted at 11:07 AM , on January 27, 2020
The markets started off on a somber note during the week with the Sensex losing nearly 820 points in the first 3 days. The fall was significant for two reasons. Firstly, such sharp falls are not seen in the midst of a pre-budget rally. Secondly, the fall in Sensex happened with a sharp spike in the VIX. Here is what actually drove the indices lower.
A worrying quarter
The results are coming in thick and fast and there were some real concerns in a number of heavyweights. HDFC bank and Kotak Bank reported larger than expected NPAs. TCS had growth issues and RIL saw GRMs and petchem margin falling. Of course, there were smaller banks like RBL which saw a sharp fall in profits but the macro worry appears to be that the consumption slowdown is beginning to hit the private banks. Now PSU banks will be closely watched. Continue reading