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PPF interest rate: PPF to fetch 7.1%, NSC 6.8% as govt slashes small savings schemes interest rates
The government today announced a steep cut in the interest rates on small savings schemes for the first quarter (April to June) of FY 2020-21. Interest rates on various small savings schemes have been cut by between 70 basis points and 140 basis points (100 basis points = 1 per cent).
For instance, interest rates on the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana have been cut by 0.8% or 80 bps, each. Post office time deposits (of certain tenors) have seen the sharpest cut of 1.4 per cent or 140 bps. After the latest reduction, the PPF will earn 7.1 per cent (down from 7.9 per cent), Sukanya Samriddhi Yojana 7.6 per cent (8.4 per cent), and the time deposits will earn 5.5-6.7 per cent for the April-June quarter.
Here is a look how much each of the small savings schemes will earn for the quarter ending June 30, 2020.
% change in Small Savings schemes interest rates
Instrument Interest rate (%) from Jan 1, 2020 Interest rate (%) from April 1, 2020 Change(%) Savings deposit 4 4 0 1 year Time Deposit 6.9 5.5 -1.4 2 year Time Deposit 6.9 5.5 -1.4 3 year Time Deposit 6.9 5.5 -1.4 5 year Time Deposit 7.7 6.7 -1 5 year Recurring Deposit 7.2 5.8 -1.4 5 year Senior Citizen Savings Scheme 8.6 7.4 -1.2 5 year Monthly Income Account 7.6 6.6 -1 5 year National Savings Certificate 7.9 6.8 -1.1 Public Provident Fund 7.9 7.1 -0.8 Kisan Vikas Patra 7.6 6.9 -0.7 Sukanya Samriddhi Yojana 8.4 7.6 -0.8
Source: Ministry of Finance website
More bad news for fixed income investors
Interest rates on small savings schemes (except for post office savings account) were last revised in July 2019 – rates were cut by 10 basis points (100 bps = 1 percentage point). Since then, interest rates have been kept unchanged. The Economic Survey had earlier suggested that the interest rates on the small savings schemes be reduced to bring them in consonance with the interest rates prevailing in the economy.
The latest rate reduction in small savings schemes does not bode well for fixed income investors, especially for senior citizens who are dependent on interest as a major source of regular income. This is because over the past one year, banks have also been reducing interest rates on fixed deposit (FDs). According to a Times of India report, State Bank of India’s (SBI) one-year fixed deposit is fetching less than 6 per cent for the first time since August 2004. After the Reserve Bank of India (RBI) cut the repo rate by 75 bps on March 27, 2020, SBI, slashed its FD rates the same evening by up to 50 bps. After the cut, SBI’s one-year FD will earn 5.2 per cent (senior citizens will earn 6.2 per cent).
How interest rates are set on small savings schemes
The interest rates on small savings schemes are reviewed every quarter by the government. The formula to arrive at the interest rates of the small savings schemes was given by the Shyamala Gopinath Committee. The committee had suggested that the interest rates of different schemes should be 25-100 bps higher than the yields of the government bonds of similar maturity.
Small savings scheme interest rate
Instrument Interest rate (%) from April 1, 2020 Compounding frequency Savings deposit 4.0 Annually 1 year Time Deposit 5.5 Quarterly 2 year Time Deposit 5.5 Quarterly 3 year Time Deposit 5.5 Quarterly 5 year Time Deposit 6.7 Quarterly 5 year Recurring Deposit 5.8 Quarterly 5 year Senior Citizen Savings Scheme 7.4 Quarterly and Paid 5 year Monthly Income Account 6.6 Monthly and Paid 5 year National Savings Certificate 6.8 Annually Public Provident Fund 7.1 Annually Kisan Vikas Patra 6.9 (will mature in 124 months) Annually Sukanya Samriddhi Yojana 7.6 Annually
Source: Finance Ministry circular dated March 31, 2020
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Ashok Leyland joins hands with health authorities to tackle COVID-19 crisis
A Hinduja Group flagship firm Ashok Leyland on Tuesday said it is actively working with government authorities in tackling COVID-19 (coronavirus) pandemic.
The commercial vehicle major has aligned itself with the Department of Health and Family Welfare for a slew of initiatives, Ashok Leyland Ltd said in a statement.
The Chennai-based firm is supplying 3 ply masks, N95 masks, disposable gloves, liquid handwash, sanitisers, body suits for health service personnel, it said.
Besides, it is providing disinfectants, protective chemical guard suit, and chemical protection goggles for sanitation staff, it added.
It is also deploying ten vehicles with drivers for emergency logistics operation for use by the health department, the company said.
“We are leaving no stone unturned to help the community at large. We shall work with the government at every step and stay supportive of all their initiatives in the coming days,” Ashok Leyland President HR, Communications & CSR Balachandar NV said.
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RBI: RBI says many banks are not extending doorstep services to senior citizens
Mumbai: The Reserve Bank on Tuesday said many banks are not extending doorstep services for senior citizens and differently-abled persons even after three years of it issuing advisories and asked for “strict compliance” on the same by April 30.
The directions assume significance as they come amid the COVID-19 pandemic, where the senior citizens have been marked out as the most vulnerable and advised against stepping out of their homes as the country fights to limit the impact through radical measures like a three-week lockdown which is underway.
In a notification, the RBI drew banks’ attention to an advisory issued in 2017 where concerted efforts were asked to be taken to take banking services to those over 70 years of age and to the differently-abled.
“Although banks were advised to implement the instructions by December 31, 2017, it has been observed that such services are yet to be offered by banks or were restricted to select branches,” the RBI said.
“Banks shall report the progress made in this regard to the Customer Service Committee of the Board every quarter. Further, they must ensure strict compliance with the above instructions by April 30,” the notification added.
The charges associated with rendering such a service should be made public and adequate publicity should be given to make everyone know about the availability of these services, the central bank said.
The notification asked banks to offer the doorstep banking services on pan India basis, develop a Board approved framework for determining the nature of branches/centres where these services will be provided mandatorily and those where it will be provided on a best effort basis and make the policy public.
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ONGC: Natural gas prices cut by steep 26 pc; huge dent in ONGC revenues
New Delhi: Natural gas prices on Tuesday were cut by a steep 26 per cent to its lowest rate since the pricing was made formula-driven in 2014, a move that is likely to translate into lower CNG and piped cooking gas prices but also make a huge dent in revenues of producers such as ONGC.
Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) said the bulk of India’s existing gas production will be priced at USD 2.39 per million British thermal unit for the six-month period beginning April 1, down from USD 3.23 as of now.
This will be the second reduction in six months to the lowest since 2014.
The price of gas produced from difficult fields such as deepsea too has been cut to USD 5.61 from USD 8.43 per mmBtu now.
Prices of natural gas, which is used to produce fertiliser and generate electricity and is also converted into CNG for use in automobiles as fuel and cooking gas for households, are set every six months — on April 1 and October 1 each year. ANZ BAL
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COVID-19: JEE-Main likely to be held in May last week, says HRD Ministry
NEW DELHI: The Joint Entrance Examination (JEE) for admission in engineering colleges, which has been postponed due to coronavirus situation, is likely to be held in the last week of May, the HRD Ministry’s National Testing Agency (NTA) announced Tuesday.
“As of now the examination is proposed to be held in the last week of May 2020. Exact date will be announced after assessing the situation in the coming weeks,” the HRD Ministry said in a statement.
The JEE-Main, which is also a preliminary test for admission to IITs and NITs, was earlier scheduled to be held from April 5-11, but was postponed in view of the coronavirus outbreak in the country.
“We hope that normalcy will be restored relatively soon but for now, NTA is closely monitoring the scenario to evaluate if the situation may necessitate any change in the schedule. Accordingly, the Admit Cards for the Examination will now be issued after April 15 based on the situation at that time,” the statement further said.
The death toll due to COVID-19 pandemic has risen to 32 and the number of total positive cases to 1,251 as on Monday 9.30 PM, up from 1,024 positive cases and 27 deaths as on Sunday evening, the health ministry said.
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coronavirus: Urgent need for states to align policy with ‘Right of Way’ rules: TAIPA
New Delhi: Data consumption has surged 30 per cent with businesses switching to work-from-home amid the coronavirus outbreak, and there is an urgent need for states to align their policies with Centre’s ‘Right of Way’ rules, industry body TAIPA said on Tuesday. Some metropolitan cities like Hyderabad and Bengaluru have already seen cellular network data consumption increase by 70 per cent since the lockdown began, the Tower and Infrastructure Providers Association(TAIPA) said.
“COVID-19 has created an unprecedented crisis across the globe because of which the Government has allowed and directed public and private employees to work from home, which has lead to over 30 per cent increase in data consumption and (this) will continue till lockdown exists,” TAIPA said.
TAIPA has written to the telecom secretary, and chief secretary of states in this regard, the statement said adding the association has highlighted that telecom connectivity is pivotal for several essential services and applications amid the nationwide lockdown.
The association said that significance of telecom services is even more as organisations have declared Work from Home and schools/ universities have adopted e-learning.
“The general public is quickly adopting to e-services, OTT platforms, e-commerce and e-governance etc. All this has led to tremendous upsurge in mobile and internet traffic by more than 30 per cent during the lockdown,” it said.
To cope with the surge in traffic, the telecom network capacity will have to be enhanced quickly through additional/upgradation of existing infrastructure comprising of telecom towers/ Cell on Wheels/ optical fibre cable (underground and overhead) amongst others.
“To keep the data usage and smooth functioning of telecom services 24/7, the telecom sector needs critical robust infrastructure. With more than 3 years gone, only 16 states out of 36 States/UTs have broadly aligned their policy with Right of Way (RoW) policy 2016,” T R Dua, Director-General, TAIPA said.
He said that policy anomaly in the States have deprived the public of seamless network and internet connectivity and would further impede roll-out of new technologies like 5G, in the states.
The right of way (RoW) rules, notified way back in November 2016, provides for a framework to give approvals for setting up of telecom towers and laying of fibre cables, settling of disputes in a time-bound manner, as well as improving coordination between companies and the State government authorities and local bodies. It also prescribes for setting up a web-based online portal for single window clearance mechanism to ensure time-bound approvals. MBI MKJ
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Yes Bank Share Price: Sebi fines YES Bank’s two promoter entities Rs 1 crore
Markets regulator Sebi on Tuesday imposed a penalty of Rs 50 lakh each on two promoter entities of YES Bank for not making requisite disclosures pertaining to encumbrance of shares.
The two entities that have been penalised are YES Capital (India) and Morgan Credits.
It was alleged that by not making requisite disclosures of encumbrances of shares of YES Bank to the stock exchanges and the lender, the two promoter entities have violated the provisions of SAST (Substantial Acquisition of Shares and Takeover ) Regulations.
YES Capital had raised Rs 630 crore from Franklin Templeton Mutual Fund through unlisted Zero Coupon Non-Convertible Debentures (‘ZCNCD’) in September 2017. As a part of the transaction, YES Capital acceded to a condition that it will maintain a cover ratio of 3.3 times till 12 months and 3 times thereafter.
Besides, Morgan Credits had raised Rs 950 crore from Reliance Mutual Fund through unlisted ZCNCD in April 2018 and as a part of the transaction, Morgan Credits acceded to a condition that it will always maintain a cap on the borrowing cap at 0.5 times.
As per the shareholding pattern of YES Bank filed with the stock exchanges as on March 31, 2019, YES Capital and Morgan Credits held 3.27 per cent and 3.03 per cent stake, respectively in the private lender.
Based on the observations, Sebi examined whether the conditions of maintaining a ‘Cover ratio’ or ‘Borrowing cap’ as part of borrowings by these promoters can be construed as a form of ‘encumbrance’ on shares of the bank.
In its submission to Sebi in March 2019, YES Bank had said that it was not privy to the transactions entered into by YES Capital and Morgan Credit and it has not received any disclosure from themboth about any encumbrance on their shareholding in the bank.
Further, stock exchanges — BSE and NSE —in February 2019 had stated that no disclosures were made to them with respect to these transactions.
Sebi found that the “transactions carried out by the noticee (YES Capital and Morgan Credits) by way of raising funds through unlisted ZCNCD with the conditions of maintaining a ‘Cover ratio / ‘Borrowing Cap’ as part of borrowings is construed as a form of ‘encumbrance’ on the underlying shares of YBL (YES Bank Ltd) held by noticees and that by not making requisite disclosures of the said encumbrances on shares of YBL held by them to stock exchanges and YBL, the noticees have violated the provisions of …the SAST Regulations”.
Accordingly, the Securities and Exchange Board of India (Sebi) has levied a fine of Rs 50 lakh each on YES Capital and Morgan Credits.
SAST Regulations require a promoter to disclose encumbrance of its shares and the term ‘encumbrance’ include a pledge, lien or any such transaction, by whatever name called.
Further, through the frequently asked questions (FAQs), it has also been clarified by Sebi that non-disposal undertakings are also included in such disclosure.
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China’s ‘mini-IPO’ reform takes on new virus urgency
SHANGHAI/HONG KONG: One unforeseen outcome from the coronavirus outbreak in China is that it is speeding up capital market reform even as economic activity is gummed up by restrictions to contain its spread.
Beijing is stepping up plans for a new ‘mini-IPO” market to help the country’s army of small companies access capital quickly, as it keeps growing the next generation of innovative companies despite the short-term impact from the virus on business confidence.
The reform on China’s moribund New Third Board is the second major step in less than a year aimed at developing the country’s ability to finance its next tech champions, artificial intellignce or fifth-generation telecoms (5G) firms.
Plans to transform the New Third Board into a feeder for the bigger exchanges were designed to help create a financing channel for start-ups without the need for the foreign finance that supported China’s Alibaba and Tencent.
The devastating hit from the virus outbreak on small- and medium-sized enterprises – which employ around 80% of workers – could see the new scheme rolled out by July.
“The epidemic makes life hard for SMEs, which is why Beijing is accelerating the reform,” said Zhang Chi, CEO of private equity firm Xin Ding Capital.
Chinese President Xi Jinping in February called on banks and others to boost support for virus-hit SMEs. Two weeks later, the National Equities Exchange and Quotations (NEEQ), operator of the New Third Board, said it would accelerate its reform plans.
Under the scheme, companies already on the board which meet certain criteria can apply to NEEQ for what brokers have dubbed a “mini-IPO”, involving selling shares to new investors and joining a new “select tier.”
Companies in the tier can later migrate to Shanghai’s STAR Market or Shenzhen’s ChiNext – both bigger tech hubs, offering greater opportunities to raise more funds – without the rigours of another IPO.
The regulator has asked brokerages to drum up investor interest while more than 100 companies, ranging from biotech firms to software makers, are preparing to join the new tier.
“It’s an encouraging move,” said Wilson Chow, who heads PwC’s global TMT industry practice. “This will certainly encourage these companies to stick to domestic capital markets and continue supporting national growth policies.”
REFORMS
The board will help China’s drive toward capital sufficiency at a time of trade tensions with the United States.
As well as supporting start-ups, the plan underlines policymakers’ determination to fund promising businesses at home – and their willingness to give up control of the process to achieve that.
Chinese companies have raised $279 billion through IPOs in the past five years – 30% of the global total – but more than half of those funds were raised in Hong Kong and New York. Firms opted to list abroad to avoid red tape and the lenthy approval process, but also because the sums available were so much larger.
Last year’s big reform was Shanghai’s Nasdaq-like STAR Market which was the first in China to do away with regulatory approval for each IPO and the first to allow pre-profit companies to list, at valuations set by the market.
So far, 92 companies have raised $12.9 billion via STAR Market floats – more than half the total raised in Shanghai in that time.
MINI-IPOS
Battery-maker BTR, telecommunications company Guizhou Flidam Technology Co and drugmaker Senxuan Pharmaceutical are among companies that have hired underwriters for mini-IPOs.
“It’s a new way out for China’s SMEs,” said Yin Rongzao, chairman of Borunte Robot Co Ltd, a privately run robot maker in southern Guangdong Province which aspires to join the new tier.
Some 9,000 companies are now listed on the board, but it has suffered from poor liquidity since China’s spectacular 2015 market boom and bust.
Mini-IPO candidates need a minimum expected market capitalisation of 200 million yuan, compared with 1 billion yuan ($141.4 million) for the STAR Market.
Regulators have also widened the pool of potential investors by cutting the minimum asset threshold to 1 million yuan from 5 million yuan, and are allowing mutual funds to invest.
Tu Zhengfeng, managing director of Shenwan Hongyuan Securities, who oversees tech-related underwriting, estimates that up to 80 companies could join the new tier in the first year.
Not all of China’s attempted market reforms have worked – a 2018 attempt to list Alibaba and others at home via so-called Chinese Depositary Receipts was quietly shelved – and some investors remain fearful of the risk.
Between an all-time high in April and July 2015, the New Third Board plunged 40% and low trading volumes has made recovery more difficult than for other, bigger exchanges.
Frank Bi, partner of law firm Ashurst, sounded a note of caution.
“It will be important to monitor these reforms and how sustainable they are if they’re to have any long-term effect on where Chinese companies choose to list,” he said.
Though it may take time for markets to embrace the mini-IPOs, new ways to raise funds seem inevitable.
“China’s economy is moving toward a more innovation-based growth model, and you need to transform your capital markets to support that change,” said Fan Lei, economist at Sealand Securities, adding that traditional bank loans secured against company assets were not the solution for innovative start-ups.
“The reform will also help develop direct financing and reduce China’s reliance on debt.”
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New foreign investment category first step towards inclusion of rupee bonds in global benchmarks: DBS
Singapore: The unrestricted access of foreign investors to select Indian bonds is a first step towards facilitating inclusion of INR bonds in global bond benchmarks, says a DBS report.
The Reserve Bank on Monday opened certain specified categories of government securities (G-Secs) for non-resident investors as part of an initiative to deepen the bond market.
RBI in a notification on Monday said that a separate route namely, Fully Accessible Route (FAR) for investment by non-residents in securities issued by the Government of India has been notified.
“Assuming 15 per cent of Rs 7.8 trillion gross borrowings for FY21 is considered under the FAR, eligible securities will amount to Rs 1.2 trillion (around USD 15 billion).
“This together with around Rs 4.3 trillion of existing securities cumulatively make USD 70 billion worth securities eligible,” DBS Bank economist Radhika Rao said in a note.
Rao further noted that “if inclusion into global indices is considered, this might translate into a potential weight of 4-6 per cent on the JPM GBI-EM Index and less than 1 per cent on the Bloomberg Global aggregate bond index.”
According to Rao, the plan to free up part of the GSec issuance to full FPI participation was announced in February’s Budget, marking a first step towards facilitating inclusion of INR bonds in global bond benchmarks.
Finance Minister Nirmala Sitharaman in the Budget for 2020-21, had announced that “certain specified categories of Government securities would be opened fully for non-resident investors, apart from being available to domestic investors as well.”
In addition, all new issuances of Government securities of 5-year, 10-year and 30-year tenors from the financial year 2020-21 will be eligible for investment under the FAR as ‘specified securities’, RBI said.
“Scope of incremental flows hinge on the broader risk-environment, which at this juncture is tepid, with less than 60 per cent of the existing limit used up. If and when bonds are included in global benchmarks (also factoring in the lead time for due processes), the economy will able to draw in less volatile and long-term focused funds,” Rao added.
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Gold falls as dollar firms, shares rally; set to post quarterly gain
Gold prices fell on Tuesday as the dollar firmed and as shares rose on hopes of a rebound in China economic activity, while safe-haven demand amid concerns over the coronavirus outbreak kept the metal on track for its sixth straight quarterly gain.
Spot gold fell 0.5 per cent to $1,614.41 per ounce by 0824 GMT. It gained about 6.4 per cent for the quarter, and around 1.8 per cent for the month. US gold futures eased 0.2 per cent to $1,615.50.
“The dollar, yields, and a better equity market performance are pressuring gold,” said Stephen Innes, chief market strategist at financial services firm AxiCorp, adding that the negative correlation between equities and gold has started to form again.
The dollar gained against its key rivals as investors braced for prolonged uncertainty and governments tightened lockdowns and launched monetary and fiscal measures to fight the virus.
Asian shares rallied on positive factory data from China that raised hopes of a rebound in economic activity, while longer-term US Treasury yields followed the stock market rally on Monday as the US government was in talks with healthcare companies to mass produce coronavirus vaccines.
Weighing further on gold, Russia’s central bank announced it would stop buying gold starting April 1 and offered no explanation behind the decision.
“However, it’s not catching traders by surprise as lower oil prices mean fewer petro dollars per barrel for the central bank to buy gold … If oil prices remain depressed, there will probably be a similar curtailment of bullion purchases across other oil-exporting central banks,” Axicorp’s Innes said.
Oil prices remained near 18-year lows as the virus-led shutdowns put pressure on demand.
“With central banks unleashing a tsunami of quantitative easing (QE) at a time when fear is running rampant in markets and (as) government debts are about to explode, it seems like the perfect cocktail that could push gold back to record highs,”
said Ajay Kedia, director at Kedia Commodities in Mumbai.
Among other precious metals, platinum was unchanged at $723.18, but was on track to post its biggest quarterly percentage loss since 2008.
The world’s largest platinum producers Anglo American Platinum , Sibanye-Stillwater and Impala Platinum have declared force majeure on contracts after a three-week national lockdown in South Africa forced operations to close.
Palladium slid 1.2 per cent to $2,298.34 an ounce, while silver shed 0.4 per cent to $14.06, and was set to post its worst quarter since June 2013.
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oil prices: Oil to stay below $40 in 2020 on virus shock, Opec+ deal collapse: Poll
Oil prices will stay below $40 a barrel this year, as measures aimed at halting the rapid global spread of the coronavirus cripple demand and the collapse of an OPEC+ deal adds to a mounting supply glut, a Reuters poll showed on Tuesday.
The survey of 40 analysts forecast Brent crude prices would average $38.76 a barrel in 2020, 36 per cent lower than the $60.63 forecast in a survey in February.
The 2020 outlook for West Texas Intermediate crude was slashed to $35.29 a barrel from last month’s forecast for $55.75.
Both Brent and WTI crude prices are now trading in the low $20s. Global benchmark Brent slumped nearly 70 per cent from January highs as global virus-led lockdowns hammered demand and a Saudi-Russian price war flooded the market.
“The floor has dropped out of the oil market, and we do not expect it to return until the fourth quarter,” Economist Intelligence Unit analyst Cailin Birch said.
Oil prices, which had already been weak, took a steeper dive in March when a deal on supply curbs between the Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, fell apart.
Analysts expect global demand to contract by between 0.7 million and 5.0 million barrels per day (bpd) in 2020, potentially eclipsing the fall in 2009 during the financial crisis.
“Mobility restrictions to help contain the spread of the virus are largely to blame for the plunge in demand,” UBS analyst Giovanni Staunovo said, adding that flight restrictions in Europe and the US were major blows to jet fuel demand and “tapering” traffic would hit diesel and gasoline consumption.
The slump in gasoline and jet fuel demand has crippled refining margins across Asia, Europe and the United States causing refiners worldwide to slow output.
“We will see a new round of negotiations between Saudi Arabia and Russia in the future. There is no alternative to supply cuts by OPEC+ in this situation,” said LBBW analyst Frank Schallenberger.
Saudi Arabia has struggled to sell additional crude to refiners due to surging freight rates amid low demand.
But Edward Moya, a senior market analyst at broker OANDA, said “a revival of production cuts by OPEC+ seems very unlikely. OPEC will take a wait-and-see approach and hope the second half of the year will see a strong rebound in demand.”
US production could fall by 0.5 million to 3 million bpd this year, the poll showed.
“US supply will drop sharply as weaker shale players will drop out. They don’t seem to be properly hedged for prices this low,” said David Ölzant, an analyst at Raiffeisen.
Plummeting prices have left only a handful of producers who can turn a profit from their newest wells, Reuters analysis of data provided by consultancy Rystad Energy showed.
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Should I invest in small cap mutual funds right now?
By Rushabh Desai
Two small cap mutual fund schemes, SBI Small Cap Fund and DSP Small Cap Fund, has reopened for lumpsum investments yesterday. Others are likely to follow suit in the coming days. The small cap space has corrected around 30% in the last one month, making the category relatively attractive.Is it time for you to join the party?
First of all, you should understand that small caps are highly risky and volatile. One will need a lot of time and patience (at least six to seven years) to earn the alpha returns in this category. Many say “time in the markets is more important than timing it if you have a long-term horizon.” I don’t fully agree with this statement, especially when it comes to lumpsum investors in the mid & small cap segments. There have been many years at a stretch where particularly the small caps have either delivered negative / zero or negligible returns. That is why I believe lumpsum investors should buy small caps strictly in the correction periods to get the alpha one deserves from this category.
Since 2018 the mid and small cap segments have been correcting quite a lot. We did see a good amount of recovery in the mid cap space, but due to the global spread of COVID-19 the entire equity segment have been brutally massacred, making certain pockets, especially the small caps super lucrative for high risk lumpsum and SIP investors from the valuation/price point of view.
The above table shows that small cap category has fallen the most from their all-time highs, compared to others, making them very lucrative to buy in a staggered from a long-term alpha generation point of view.
Please keep in mind that due to the global lock down of many economies, the recovery in the small cap space shall be slow and many companies may go bust. We still don’t have a solution to the COVID-19 pandemic. Markets are going to be very volatile and small caps will be it hard by in a market mayhem.
Investors should not expect a sharp rally in the small cap space from a short-term perspective. When the recovery starts, the large cap schemes shall recover first. Small caps will recover much later. If you have the patience and invest with quality managers and management, it helps you to get the returns you deserve from small cap schemes.
Should any investor can get into the small cap segment? No, only those with a high risk-taking ability and a minimum six to seven years’ time-frame should invest in the space.
From the valuations perspective AMCs may have taken a very good call of opening their small cap schemes for lumpsum investments. No one can predict the very bottom, anyone having a high-risk appetite should start staggering (2 – 3 months) their lumpsum investments in quality small cap funds. COVID-19 is definitely temporary but once that is behind us some serious money will be made in the recovery process from these levels. Before investing know your goals, risk, asset allocation & time horizon.
(Rushabh Desai is an Independent Financial Advisor, based in Mumbai)
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Kalyani Group contributes Rs 25 cr to PM-CARES to fight coronavirus pandemic
NEW DELHI: Auto components major Bharat Forge, the flagship company of Kalyani Group, and other group firms on Tuesday pledged Rs 25 crore contribution to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) to fight against the coronavirus pandemic.
The group is also looking at using its R&D facilities to meet requirements of critical medical equipment such as ventilators, respiratory equipment and other sanitation/hygiene goods.
The other group companies involved in the donation are Kalyani Steel, Saarloha Advanced Material Pvt Ltd, Automotive Axles and Hikal Ltd, the group said in a statement.
Bharat Forge Chairman Baba Kalyani said, “The group is committed to assist the central and state government and the local authorities in all possible ways to deal with the pandemic.”
He further said, “We are also using our group R&D facilities to look at ways of easing the shortage of critical medical equipments, including ventilators, respiratory equipment and other sanitation/hygiene equipment.”
Kalyani said as part of CSR activity, the group has started addressing food requirements of local community and will increase the efforts in the coming days.
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SBI employees pledge Rs 100 crore to PM CARES Fund to combat Covid-19
Kolkata: In the fight against COVID-19, around 2,56,000 employees of the country’s largest lender, State Bank of India (SBI) have decided to contribute two days’ salary to the Prime Minister’s National Relief Fund. With this collective effort, Rs.100 crore will be donated to the PM CARES Fund which is created to fight the coronavirus pandemic.
Last Week, SBI had committed 0.25% of annual profit for FY 2019-20 as a part of its CSR activities to fight COVID-19.
Rajnish Kumar, Chairman, SBI said in a release: “It is a matter of pride for State Bank of India that all our employees voluntarily came forward to pledge their two days’ salary to the PM CARES Fund. This is the time where we all need to combat this battle of the Covid-19 outbreak with united efforts. We at SBI would keep continuing our support to the government in all its endeavours to address the challenges of this pandemic.”
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coronavirus: COVID-19: REC contributes Rs 150 cr to PM CARES fund
NEW DELHI: State-run REC on Tuesday pledged Rs 150 crore under PM CARES fund to fight against COVID-19.
“REC Limited… has pledged to donate Rs 150 crore to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund to support India’s fight against coronavirus”, a PFC statement said.
Besides, the one-time contribution to the newly-formed emergency fund, REC’s employees will voluntarily contribute one day’s salary to the Prime Minister’s National Relief Fund (PMNRF).
REC remains committed to supporting & contributing to the nation’s fight against #COVID19. As part of our on-going… https://t.co/WzbPjhqaph
— REC Limited (@RECLindia) 1585580903000
REC is committed to participating in corporate India’s response to COVID-19 through funds, community welfare plans and through leveraging its expertise to offer assistance, the company said.
On Monday, Power Minister R K Singh had tweeted, “We feel honoured to share that the public sector undertakings of the ministries of power and MNRE have decided to contribute Rs 925 crore to the PM CARES fund with Rs 445 crore being deposited on 31st of March and remaining in the first week of April.”
REC is a financier of the power-sector projects under the administrative control of Ministry of Power.
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Hotels, resorts come in handy in India’s fight against Covid-19
In India’s fight against the deadly Covid-19 infection, hotels and resorts are coming in handy by serving as isolation wards.
In the worst-affected areas, state governments are converting these facilities into isolation wards, a Times of India report said.
The report further added that the Madhya Pradesh government has acquired 28 hotels, resorts and marriage gardens in the worst-affected cities of Ujjain and Indore.
“As many as 1,200 patients can be accommodated in these establishments. If needed, we will acquire more buildings,” the report quoted Indore Development Authority chief executive officer Vivek Shotriya as saying. He further added that the target is to create capacity for 2,000 patients.
Other states are also resorting to the same method — taking over hotels for conversion into isolation wards.
In Rajasthan’s Bhilwara, government has take control of 20 hotels to use them as isolation facilities.
“We have taken over 1,500 rooms and currently 600 people are quarantined in these hotels,” the TOI report quoted Bhilwara district collector Rajendra Bhatt as saying.
Not just hotels and resorts, the central government has taken help of the railways and empty coaches have been turned into isolation wards.
Earlier, Anand Mahindra had offered Mahindra Holiday Resorts to government for use as temporary care facilities.
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How to recharge your Jio number from an ATM near you?
With all telecom outlets closed because of the 21-day lockdown put in place to fight the coronavirus pandemic, Reliance Jio has come up with a new way of recharging your number.
The telecom company announced recharge facility at the ATMs of select banks.
These banks are State Bank of India, Axis Bank, ICICI Bank, HDFC Bank, IDBI Bank, CitiBank, DCB Bank, AUF Bank, Standard Chartered Bank.
Recharge your Jio number at your nearest ATM. #JioTogether #CoronaHaaregaIndiaJeetega #StayHomeStaySafe… https://t.co/tvLkElYTX4
— Reliance Jio (@reliancejio) 1585481419000
The telco has listed the steps customers would require to follow in order to get recharge done at ATMs. These are:
1. Insert your card in the machine
2. Choose Recharge option from the menu.
3. Enter the mobile number that you want to recharge.
4. Enter your ATM Pin.
5. Enter the recharge amount.
6. Confirm (Press enter).
7.On your screen a recharge message will be displayed. The corresponding amount will be deducted from your account.
8. You will receive the recharge message from Jio.
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