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BEIJING: China on Tuesday successfully launched the last satellite of its BeiDou Navigation Satellite System (BDS), touted to be a competitor to the Global Positioning System (GPS) of the US, taking another step to becoming a major space power. The satellite was launched on Tuesday morning from the Xichang Satellite Launch Centre in southwest China's Sichuan Province. The satellite, the 55th in the family of BeiDou that means "Big Dipper" in Chinese, was successfully sent into space by a Long March-3B carrier rocket, according to the China Satellite Navigation Office, state-run CGTN reported. The launch will mark the completion of the country's domestically developed BeiDou network, one of the four global navigation networks alongside with the US' GPS, Russia's GLONASS and the European Union's Galileo. India too is building its navigational system called the Indian Regional Navigation Satellite System (IRNSS), with an operational name of NAVIC. Some of the countries like Pakistan are using BDS. China is also promoting its use in the countries signed-up for its mega Belt and Road Initiative, (BRI). The BDS-3 satellite was originally scheduled to be launched on June 16, but it was later postponed due to technical problems which were discovered in pre-launch tests. The latest GEO satellite is the 55th BDS system, and will work with other members of the network, allowing global users to access high-accuracy navigation, positioning and timing as well as communication services, official daily Global Times reported earlier. Compared to previous generation series, the constellation of BDS-3 with an array of 30 satellites flying on three different orbit planes - three at the GEO, three at the inclined geosynchronous orbits, and 24 at the medium Earth orbit - have higher bandwidth. They enable enhanced communication capability and carrying more accurate and stable domestically developed atomic clocks to improve the precision of timing and navigation services, the report said. The first BeiDou satellite entered orbit in 2,000, and started providing positioning, navigation, timing and messaging services to domestic users in China and users in the Asia-Pacific region in December 2012. The BDS system started providing global services at the end of 2018, when construction of the BDS-3 primary system had been completed. The Tuesday mission will complete the BDS-3 system, which, according to Wu Di, a scholar with the satellite positioning technology centre of Wuhan University, will further enhance the quality of services of the system for global users providing stronger signals.
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Market pundits are worried about the disruptions caused by the Covid pandemic in the mid cap spce, and poor earnings visibility in the segment. However, the mid cap schemes have been inching up in the last one month. Shivani Bazaz of ETMutualFunds.com reached out to Pankaj Tibrewal, EVP & Sr Fund Manager, Kotak Mahindra Asset Management Company, to find out what is happening in the mid cap space. Tibrewal, who manages Kotak Emerging Equity Fund, one of the consistent performers in the mid cap space, says FY22 should be a more normalised year for economic growth and when economy turns the corner and growth rate increases, mid and small companies would benefit the most. “The attractive valuation in the mid-small cap space makes a compelling case to include this category of funds in one’s portfolio at this stage,” he says. Edited interview. According to equity analysts, earnings outlook for the mid cap segment is bleak. What is your view?At an aggregate level, financial year (FY) 21 earnings will be impacted by the lockdown in first quarter; a broader earnings recovery may be visible only from the second half of FY 2021. However, we believe that beyond the near-term volatility, the markets will focus on the long-term sustainable earnings power of the companies and not on the 1-2 quarter disruption due to Covid. Also, there are sectors like rural/agri consumption, agro chem, specialty chemicals, cement, IT and pharma where earnings will be quite resilient even in FY21. Further, in most of the sectors we are seeing the trend of companies with strong balance sheet gaining the market share and growing earnings even as the aggregate market growth is subdued. Our focus is on positioning the portfolio in such sectors and companies, to take advantage of the earnings recoveryMany investment pundits are asking investors to stay away from mid cap schemes due to the lack of clarity on whether mid-sized companies are likely to survive the economic disruptions caused by the pandemic, nationwide lockdown, ongoing crisis, etc. What is your reading of the situation?Since January 2018, mid cap and small cap indices have seen sharp pull back and broader markets have been in pain for the last 30 months. The current downturn in the mid-small caps is already one of the longest and deepest, especially for small caps. Since January 2018 till 23rd March 2020, 79% of the top 1500 companies by market cap have already corrected by more than 50% and 70% of them have corrected more than 60%. This kind of a price damage is already similar to the 2008-09 time period as we have been under weak economic conditions for last few years even pre-Covid. Even during the financial crisis, the pain in mid-small caps was not so long. The current divergence between performance of large and mid-small caps is at historical extremes. Relative valuations of mid-small caps vis-a vis Nifty has corrected back to 2014 lows. History suggests that such divergences don’t exist for too long and post such large underperformance mid-small caps tend to outperform large caps over the next 18-24months. We believe that in the near term, some mid-small companies may face trouble due to tight credit and demand conditions led by lockdown but we can’t generalise the same for the entire mid-small cap universe. There are many companies in mid-small cap segment across various sectors (tiles, plywood, agrochemicals, auto ancillaries, speciality chemicals consumer durables, IT etc) which are strongly positioned on balance sheet and cash flows and would benefit from this downturn in terms of increase in market share. We are focussing on such companies which would be able to navigate the downturn and emerge stronger. Also, we believe that FY22 should be a more normalised year for economic growth and when economy turns the corner and growth rate increases, we believe mid-small companies would benefit the most. Our belief is that bottom up stock picking approach would be rewarded in mid-small space.Most mid cap schemes have failed to offer decent returns even in the five-year horizon. Many schemes, including Kotak Emerging Equity, are offering negative returns in the three-year period. How would explain the track record?It is a fact that in the last three years the broader markets have not done well. As explained above, this has been one of the longest and deepest drawdowns for mid-small caps segment and now due to Covid led correction in the equity markets, the last three 3years return of majority of midcap funds have turned negative. Kotak Emerging has also delivered marginal negative return during the last three years but has delivered significant alpha over the benchmark. The fund is not an absolute return fund and the endeavour is to consistently outperform the benchmark over longer periods of time. In the last one year, there has been a wide variation in the SIP returns in the fund. In January 2020, our one-year SIP return was 26% while in March 2020 the fund gave a SIP return of -41%, and in April a -21% SIP return. We can say that in the short-term, returns are largely driven by market sentiments and flows. While in the long-term, it is the fundamentals that will succeed and reward the disciplined investors. If you see five and 10-year returns, they have remained in the positive domain despite market turbulence. If there is no financial exigency, one must continue with their SIP/STP right now to take advantage of lower market valuations and get the benefit of rupee cost averaging. To create wealth in the long-term, now is the time to take advantage of this situation. What are the additional steps you have taken to insulate Kotak Emerging Equity Fund from imminent shocks in the economy in the next few months?We haven’t made too many changes in the portfolio over the last few months. We have inf act added to our positions in many investee companies where price has become more attractive post correction and companies that would survive the downturn and the long-term value of the business is intact. The template we use for selection of our investee companies which has helped us in this downturn are as follows: One, a good and sustainable business. Two, a great and honest management. Three, an attractive price. A good business is something that has a strong competitive advantage, is able to generate high returns on capital over sustainable periods of time, can generate strong and sustainable cash flow stream, is scalable, has longevity or a low risk of business disruption, etc. In mid-small cap companies, promoters/management plays a very important role in scaling the business and hence we look for track record of management in terms of integrity, longevity and capability. We have avoided companies with weaker balance sheet, high fixed costs, inferior cash flows, high financial leverage and corporate governance issues. We also have avoided companies where we believe that the company’s capital efficiency is poor and it won’t earn return on capital higher than the cost of capital for sustainable periods of time. Our stock picking philosophy as mentioned above, clearly demonstrates our bias towards quality and growth at reasonable price. Your exposure to the small cap segment is higher than the category average. What is the rationale? Nobody is talking about the revival of the small cap segment anymore.Yes, the observation is correct, but we never look from that perspective. Many of our investee companies in the small cap space are leaders in their sectors, trading at very attractive valuations with strong balance sheets and cash flows. We have always believed in the “Gorilla to King Kong” strategy. We at any point of time believe that one should have 50-60 solid gorillas (solid businesses) in the portfolios, some of them will turn into King Kong (large/mega caps). These gorillas could be from mid caps, small caps or even large caps subject to the market capitalisation limits defined in the offer document of the fund. Current allocation in the fund as defined by SEBI market capitalisation is approximately: Mid cap: 70%, Large cap: 11%, Small cap:16% and cash 3%. `Play it safe and avoidi unnecessary risk’ is the advice given by most investment advisors in the current situation. Does this mean one should avoid mid cap schemes?On the contrary, we are advocating a higher allocation towards mid-small cap funds through SIP/STP route over the next 6-12months. The current valuation gap of mid-small caps vis-a-vis large caps, we believe is providing an excellent opportunity for entry into mid-small cap funds. It makes sense to look at mid- small-cap dedicated funds with an investment perspective. One should consider this space if someone is having a long-term investment horizon of, say, more than five years. One can start an SIP now. These categories of funds tend to generate better returns in the long-run. The attractive valuation in the mid-small cap space makes a compelling case to include this category of funds in one’s portfolio at this stage.What are the additional steps a newcomer should take before investing in mid cap schemes? Should he have a longer minimum horizon of, say, at least seven years?Any investor should have a time horizon of 7-10 years when investing in any of the categories of equity funds, whether large cap, mid cap or small cap. Even after such a correction in markets, the 10-year returns of the midcap fund category have been decent. Equity returns also tend to be lumpy. If you were evaluating the five year returns at the end of 2007, 2008 and 2009, you would get very different results. Consequently, the best way to invest in equities is to do a SIP and take advantage of equity volatility. What is your advice to existing investors in mid cap schemes?Over the last 15 years, we have seen various disruptions: financial crisis of 2008, slowdown of Indian economy in 2011-13, Greece debt crisis, demonetisation, trade wars, and now Covid. In spite of all these, Nifty Midcap has given a 10% CAGR return and many midcap mutual funds have done better than this. Investors have been rewarded for holding and investing in midcaps through periods of heightened volatility. Valuations have corrected by 20-30% from the February-levels while the long run earnings power of a lot of companies has not been impacted to that extent. Consequently, we expect mid caps to deliver good returns over the next three to five years. This is the time to increase allocation to mid cap/small cap funds. If one already has a decent allocation, one should hold on to the investment.
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NEW DELHI: Indian Army Chief General Manoj Mukund Naravane will visit Leh and Kashmir to take stock of the ground situation this week. General Naravane's visit comes amid the heightened threat in eastern Ladakh region where over thousands of Indian Army men have been deployed a few metres away from the Line of Actual Control (LAC), following the bloody clash with the Chinese People's Liberation Army (PLA) a week ago.The Army Chief will review the force preparedness as well the deployment across the Line of Actual Control with China and Line of Control (LoC) with Pakistan. He is likely to visit on Tuesday.On Monday, corps commanders of the two countries' military met at Moldo to resolve the border issues and ease the tension in eastern Ladakh.This is the second such meeting after the first one took place on June 6 to defuse the tensions.The meeting between 14 Corps commander Lieutenant General Harinder Singh and South Xinjiang Military District chief Major General Liu Lin is happening on the lines of the one they held at the Chushul-Moldo border personnel meeting (BPM) point in eastern Ladakh on June 6.The ground situation is volatile in Ladakh, and Pangong Tso can be another flashpoint after the Galwan Valley patrolling point 14 where a barbaric attack was carried on Indian troops by the Chinese army on the night of June 15.At Pangong Tso, there is an attempt of the PLA to alter the Line of Actual Control unilaterally. The prolonged camping and a heavy presence of Chinese troops around the Pangong Lake, at a point which has been under Indian control, has emerged to be the biggest roadblock for a possible resolution to the ongoing tussle between India and China at the LAC.The Chinese have built defences in several parts between Finger 4 and Finger 8, which have been grey zones in the past. The Chinese action in Pangong Lake is seen as an attempt to change the status quo.The Indian Army has also enhanced deployment in the Hot Springs, Demchok , Koyul, Fukche, Depsang, Murgo and Galwan.After the June 15 violent clash, in which 20 Indian soldiers were killed and the Chinese troops also suffered casualties, nothing has changed and things continue to be tense in the Galwan and Pangong Tso regions.In the midst of the growing tensions, India is exploring all possible military options as a response, if the Chinese aggression continues.India has also ramped up preparations on its side along the 826-km front of the Line of Actual Control in Ladakh.
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Mumbai: The Tata Group will not curtail investments in retail businesses, even though it may be at least a year before demand returns to pre-Covid levels, said Noel Tata, chairman of two of the conglomerate’s consumer-facing firms — Trent and Voltas.“It’s difficult to say what our growth will be in the next 3-5 years while we are still in the midst of Covid-19. At this juncture, it is possible that it will take a whole year for demand to return to pre-Covid levels. Nevertheless, our retail companies do not intend to slow down expansion plans in the coming year,” Tata said in a rare interview over the weekend.Tata, 63, is also the chairman of Tata International, a trading company, and vice-chairman of Titan, the maker of watches and jewellery that is one of India’s most valuable consumer firms. In February 2019, he was inducted as a trustee of the Sir Ratan Tata Trust, one of the main shareholders of Tata Sons, the group’s holding company.On his relationship with chairman emeritus Ratan Tata, the younger Tata described him as a “mentor and elder brother”.“Yes, he is both my elder brother and a mentor, and we do meet regularly. Ratan has taken the group from revenues of $3 billion to over $100 billion, and in the process, the Tata brand is now recognised globally. I am fortunate to be able to seek his advice based on his vast experience whenever I need it,” Tata said.‘No Layoffs at Tata Retail Firms’Tata said he expected “disruption in consumption” due to uncertainty about the future, but expressed hope that this will be partly compensated by consumers spending some of the savings they may have accumulated over the past three months. Some may also be in the mood for indulgence after being in lockdown for two months.The Covid pandemic has impacted the financials of many organised retailers, forcing some to lay off employees. But Tata ruled out any such eventuality at the group’s retail ventures Trent, Voltas and Titan.“As things stand, we do not plan any layoffs. Our senior management team members have taken reductions in their remunerations commensurate with the cuts in expenditure that we have had to make as a response to the Covid situation and the consequent closure of our stores for over two months. But we have paid all our other colleagues throughout March, April and May,” Tata said.ROBUST SHOWUnder Noel Tata, Trent is getting noticed by investors on account of the growth in its retail network and track record of profitability. The Trent stock has been one of the outperformers in the Tata Group this year, gaining 41% in the past year (June 21, 2019, to June 22, 2020). On Monday, the stock closed at ₹585.95 apiece.“As for our (Trent’s) store expansion, we expect to get back to our aggressive opening agenda as soon as the Covid pandemic stabilises,” he said.Tata sees jewellery and other products driving growth for Titan. “Titan is by far the market leader in watches with over 50% share. But the watch market has not grown rapidly over the past two decades, due in part to mobile phones that have built-in watches. By contrast, the jewellery market at about Rs 3 lakh crore is 40 times bigger than the watch market. Therefore, it is but natural that jewellery will be a larger business for Titan,” he said.Tata also elaborated on Titan’s business. “Titan has launched Titan Eye Plus to address a large need for prescription and fashion eyewear; Skinn to address the perfume market; and Taneira to cater to occasion sarees.”CONSUMER FOCUSVoltas, which is also an engineering company, has been focusing on growing its consumer products business, he said. “Over the past three years, we have focused on our consumer businesses. The team has indeed done a fantastic job in establishing itself as the leader in the consumer air-conditioning business in the face of global competition.”On the proposed consolidation of the group’s consumer companies, a course of action championed by Tata Sons chairman N Chandrasekaran, the younger Tata said this looked logical on paper but was tough at the ground level, since each of the retail businesses had a “different DNA that is not easy to integrate (with others)”.“We have partners to consider — Tidco, Tesco, Starbucks — each of whom is only invested in a particular business,” Tata said.“Under Chandra’s initiative of One Tata, there has been much more collaboration between our retail companies over the past three years. All our relevant brands are available on (ecommerce app) Tata Cliq,” he said.RENTAL RELIEFTata backed the retailers’ demand for a moratorium on rentals from mall owners. “It is logical that if malls are closed to the public, no rentals should be charged to tenants.”“Malls and brands need to see each other as partners... Currently, landlords do not participate in either the success or the failure of their tenants, which needs to change… (we need) to move to a variable rental which aligns both parties’ interests,” he said.Tata urged mall owners to be proactive. “Malls must recognise that their biggest competition is ecommerce. Brands can reach customers either through shops or through ecommerce. Malls must work extra hard to keep costs and rents low to keep brands from focusing more on ecommerce, while ensuring a wonderful customer experience to entice buyers to visit malls — particularly after the Covid pandemic,” he said.
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Mumbai: The board of Adani Power has approved delisting of its shares at a floor price of Rs 33.82 a piece, which is almost 11 per cent lower than share closing price on the bourses on Friday. Adani Power shares declined up to 5 per cent intraday on Monday, but recovered to close at Rs 38.20 on the Bombay Stock Exchange, up 0.5 per cent.“The delisting proposal is in the interest of the shareholders,” the company informed the bourses in a statement. In May, the Gautam Adani-led group had announced its intention to delist its power utility, soon after industrialist Anil Agarwal announced the delisting plans of Vedanta.Promoters hold 74.9 per cent in the company. Explaining the rationale behind its plans for delisting, the company had earlier said the move will enhance its operational, financial and strategic flexibility including its ability to undertake corporate restructurings, acquisitions, exploring new financing structures.
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Mumbai: Paints maker Asian Paints may report a drop in March quarter revenues hurt by the Covid-induced lockdown, but profits may rise on the back of lower tax rate and softer input costs.Sharekhan expects the company to report a 12.1 per cent increase in adjusted net profit, helped by higher operating margins and lower incidence of tax, but has projected sales to decline 4.9 per cent from a year ago deu to the disruption caused by lockdown since late March.“Asian Paints' decorative paint volumes may have got impacted at the fag-end of quarter due to supply disruption. Industrial/auto paints continue to remain under pressure,” Sharekhan said in a note.Softer crude prices would aid gross margin expansion at companies with higher exposure to crude derivatives such as pain companies.The sharp decline in the crude prices and consequential decline in crude derivatives and packaging material would result in 194 basis points (bps) improvement in gross margins and a 112 bps improvement in operating profit margin (OPM), Sharekhan said in a note.Edelweiss expects Asian Paints to report a 11.7 per cent rise in net profit, while revenues are seen dropping 8.6 per cent.“For the quarter, we expect lockdown on account of coronavirus to affect the second half of march leading to Asian paints reporting ~2.5% YoY volume dip on a base of 10.5% (Q3FY20 saw 11% volume growth on a base of 22.0%),” Edelweiss said in a note.It said price cuts in paints have been around 1 per cent YoY, but the brokerage believes the effective price cut translation taking into account lower realisation and discounts would be negative 8 per cent.On the cost front, prices of crude linked raw materials like TiO2 and other monomers have fallen signficantly which should lead to gross margin expansion of 210 basis points.ICICIdirect.com expects Asian Paints to report a 20.9 per cent rise in net profit at Rs 587.5 crore and projects revenues to inch up merely 0.6 per cent to Rs 5,047 crore.
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New Delhi: China’s claim on parts of the Galwan river valley was first made in the boundary talks of 1960 but the coordinates it gave did not include the site of the current faceoff. It, in fact, stopped well short of the point where River Galwan meets the River Shyok, referred to as the ‘estuary’ in Chinese statement of June 19 — better known as Y-Nala or Y-junction to Indian forces.The coordinates given by the Chinese side in 1960 of the point where it believed its claim line crossed the River Galwan was: Longitude 78° 13’ E, Latitude 34. 46’ N. This was after the Indian delegation led by then Joint Secretary (East) Jagat Singh Mehta and supported by head of history division Dr S Gopal specifically asked the question on the coordinates of where the new claim line passed. This claim was later opposed by the Indian side as valleys of Galwan and Chip Chap river, among other areas, were not part of the claim line presented in 1956. This was recorded by the Indian team in the joint India-China report.“The Indian side noted that the Chinese side were unable to explain the discrepancies between the alignment shown in this Sector on the 1956 map and authoritatively confirmed by Premier Chou En-lai in 1959, and that shown in the map provided by the Chinese side at these meetings. The latter map showed an alignment which ran due east from the Karakoram Pass rather than southeast as in the 1956 map, and then, making a sudden turn southward, it cut across the Upper Shyok or Chip Chap river, the Galwan river, and the Changlung river to reach the Kongka Pass.”The talks were a failure and in the war that ensued in 1962, the Chinese side captured territory up to its claim line of 1960, which in this area effectively became the Line of Actual Control as determined by the conflict.However, as per that line and the coordinates stated in the 1960 talks, India has control of an area extending a few kilometres east of the Y-Nala or the Galwan estuary. These are ridges that include PP14, 15 and 17. And India has been patrolling up to these points without any controversy post-1962. In fact, the differences have been pronounced in Pangong Tso and Depsang, said sources.The Indian contention, based on recent statements of the Ministry of External Affairs, is that it’s the Chinese who have altered their normal patrolling pattern and challenged Indian patrols. This, followed by a massive standoff, an unprecedented violent skirmish and a claim over the entire Galwan river valley has the Indian side concerned whether China is pushing its claim in a manner to make Y-Nala the new boundary.This would be unacceptable to India as the 255 km DSDBO road runs on an alignment east of the River Shyok. India, in fact, also rejected the notion that its patrols will not cross the Galwan estuary as claimed by the Chinese side on June 19, where it even alleged that it was agreed to in June 6 Corps Commander meeting.India has made it clear that it will continue to patrol up to the area east of the Galwan estuary as it has done regularly in the past. It’s in this context that the Chinese claim on Galwan River Valley becomes controversial because it’s unclear if the coordinates meant are the same as 1960, which is also the point it forces roughly came up to in 1962.
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Sundar Pichai, the Indian born CEO of Google and Alphabet said he was disappointed with Donald Trump's order to restrict immigration including H-1B visas."Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation - we’ll continue to stand with immigrants and work to expand opportunity for all," Pichai said on the microblogging platform Twitter.Pichai, a first generation immigrant who went to the US to do his master's, joined Google in 2004 after stints in Applied Materials and McKinsey. Since then, he climbed up the ladder to become the CEO of Google in 2015 after founders Larry Page and Sergey Brin restructured the company. Pichai was named the CEO of Alphabet, Google's parent in 2019.Pichai is part of a league of Indian American executives who lead several US-headquartered technology companies. Hyderabad-born Satya Nadella leads Microsoft, while Shantanu Narayen leads Adobe.
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Prashanth Ranganathan is both happy and anxious because of the lockdown. Happy because the work-from-home model has worked very efficiently. “It puts things in perspective and drives up efficiency. Working from home means the hours I used to spend on travelling and commuting have turned into thinking and execution time. This has improved my productivity, and increased my output five-fold,” Ranganathan, CEO, PayU Finance, says. At the same time, however, working from home also brings with it certain challenges. “I have two young kids, aged five and eight. Seeing me at home signals weekends, so they are quite confused about me working all day. My day is filled with many Zoom calls, but I try to set aside 15-20 minutes between meetings to decompress, clear my head and fire off action items before the next meeting,” he adds.The bigger challenge, however, is to keep his 450-member staff motivated and missionoriented. To improve efficiency, PayU has broken up the entire company into six distinct PODs (teams). “This has increased the sense of ownership, belonging and decision-making. What used to take months to deliver is now getting done in a week or less, and with more clarity,” he says.In his Mumbai home, Ranganathan has set aside a dedicated “office space”, so he can work from his desk or switch to the couch, without leaving the study. Between meetings, he spends time with his children and ensures they have meals together. “I also work out every day. I sneak in some push-ups, squats and sit-ups during a non-participatory call or between meetings. I run every other day and join my wife’s yoga routine when I can,” Ranganathan adds.76397654
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Bengaluru: Prompted by job loss and reverse migration due to the ongoing pandemic, a growing number of blue- and grey-collared workers are starting up their own businesses in tier II and tier III cities, leading to the emergence of a bunch of startups catering to this new segment backed by the likes of Sequoia Capital and Y Combinator.They include Apna, a recruitment platform for blue and grey collar jobs; Lokal, a hyperlocal news and classifieds platform; data marketplace app Aiisma, and roadside-assistance startup ReadyAssist.They are aiming to upskill and reskill the new breed of micro-preneurs across states such as Telangana, Karnataka, Andhra Pradesh and Tamil Nadu.They are hoping to help the entrepreneurs understand business dynamics, community and distribution networks as well as soft skills like marketing and communication.Apna, for instance, has around 60 skill-based vertical communities or groups to assist workers such as electricians or plumbers who want to start their own business and help them network in order to learn about various market opportunities.Take the case of Pune-based Kishore Patra.The 36-year-old, who worked in a services company for 20 years, lost his job after it shut down recently. Patra then started a slew of businesses, including one that dealt with eco-friendly pencils and made use of Apna from February to hire around 200 people for the business. On Apna’s peer groups, Patra’s people skills and jovial personality soon made him an influencer of sorts, inspiring him to launch his own YouTube channel ApnaBizPandit.“On the app, inter-vertical skills are quite common, which otherwise is difficult to see in the real world as these people do not cross paths. This helps these informal workers expand their services and assist each other to provide business leads, share their challenges, and communicate,” said Nirmit Parikh, founder of Apna, which has received nearly $2 million in funding from Sequoia Capital and Lightspeed Venture Partners.On Lokal, micro-entrepreneurs are using the hyperlocal news and classifieds platform to build their distribution networks. The app, which raised over $3 million in seed funding from Y Combinator and others in November 2019, is available in Telugu, Tamil and Hindi.Recently, Ganesh, a small-time seller from Warangal, found delivery personnel to ship 1,500 hearing aid devices to others in his community via Lokal, a company executive told ET.“We have helped facilitate the sale of vegetables, homemade ornaments and even a goat in Tamil Nadu,” the executive added.Most of these sellers are new to the world of business and its infrastructural challenges – and this is where Lokal comes into the picture. “Many of them are private employees who have started selling essentials as they have not been paid salaries during the lockdown. More than 90% of local MSMEs have been adversely affected. Local beauty parlours and saloons are now selling and delivering beauty packages to sustain their income,” said Jani Pasha, cofounder of Lokal.Data marketplace startup Aiisma, for one, is helping small businesses like corner stores, resellers and micro-entrepreneurs build a presence online. “Many individuals who are out of jobs now want to go online. They are looking to make a bigger impact locally and then attempt to build a nationwide presence,” said Ankit Chaudhari, founder of Aiisma.On the other end of the spectrum, ReadyAssist, a startup that supports road-side repairs and fixes, is training engineers, diploma graduates and college dropouts through its ‘Mecademy’ initiative.So far, it has trained over 300 workers and enrolled them on the platform, with the workers able to earn Rs 14,000 to Rs 25,000 a month based on incentives. The training also enables them to own a garage with support from ReadyAssist, founder Vimal Singh said.“Through our training, we teach them quality, consistency, discipline and customer service,” Singh said.The Bengaluru-based startup, which is currently active in the southern states, is looking to expand to tier-II cities in Maharashtra, West Bengal, Madhya Pradesh and Gujarat.
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PUNE: US President Donald Trump signed an Executive Order on Monday restricting H-1B, L-1 and other temporary work permits, which he said is aimed at protecting local workers who are facing unemployment. "We have a moral duty to create an immigration system that protects the lives and jobs of our citizens", said Trump in a statement.The decision will come into effect from July 24 and be effective till December 31.Trump said that between February and April of 2020,more than 20 million United States workers lost their jobs in key industries where employers are currently requesting H-1B and L workers to fill positions. Also, the May unemployment rate for young Americans, who compete with certain J nonimmigrant visa applicants, has been particularly high — 29.9 percent for 16 19 year olds, and 23.2 percent for the 20-24 year old group. "The entry of additional workers through the H-1B, H-2B, J, and L nonimmigrant visa programs, therefore, presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak," he said in the orderIndian nationals receive nearly 70% of the 85,000 H1-B visas issued each year.The restrictions will apply only to new work visas and not to existing holders who are in the United States currently.This will also impact US tech firms more than Indian IT services providers, which have, over the last few years, reduced their dependence on H-1B visas and hired more people locally.The US tech industry blasted Trump saying that the restrictions will slow down innovation and undermine the technology industry.“The technology industry is working overtime to keep Americans connected during a global pandemic by providing food delivery services, telehealth care, collaborative business solutions, and ways for families and friends to stay connected. Looking forward, technology will continue to be crucial to the rebuilding of our (US) economy, TechNet President and CEO Linda Moore said. " Today's executive order only hinders the ability of businesses to make decisions on how best to deploy their existing workforce and hire new employees. This will slow innovation and undermine the work the technology industry is doing to help our country recover from unprecedented events.”The share of visas garnered by US firms such as Google, Amazon, Facebook and Microsoft has been rising steadily. In fiscal year 2019, seven of the top ten recipients of H-1B visas were US companies. The share of Indian companies among the top 10 visa recipients has dropped to 24% in 2019 from 51% in 2016, according to data from the US Citizenship and Immigration Services.
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MUMBAI | KOLKATA: Banks are piling up liabilities much more quickly than assets on their books, with their deposit base expanding faster than it did last year despite an unabated fall in interest rates to record lows. And with softening demand for fresh credit, the industry’s net interest margins (NIM) could shrink — at least in the short run.NIM, or the differential between interest earned and spent, may narrow 10-15 basis points in the April-June quarter, rating agency Icra’s estimates showed. A basis point is 0.01 percentage point. The impact of deposit rate cuts since April is partially offset by higher savings mobilisation and slower credit growth. Banks are mandated to invest a minimum of 18% of their deposits in sovereign securities to ensure compliance with the preset Statutory Liquidity Ratio (SLR).“Incremental deposits are not earning any spread as they are primarily going to SLR bonds that provide yields similar to the bank’s blended average cost of deposits,” said Karthik Srinivasan, group head of financial sector ratings, Icra. “The scenario is unlikely to change unless credit demand picks up.”Bank deposits have expanded at 11.3% at the end of June 5, significantly higher than the 8% annual growth seen in FY20, data from RBI showed. Total outstanding deposits were around Rs 140 lakh crore, compared with Rs 102.5 lakh crore of credit, including agriculture, corporate and individual loans.Meanwhile, deposits in Jan Dhan accounts surged since April after the government’s decision to transfer the benefits directly into these accounts. Withdrawal from these accounts was also seen at around 50%, significantly lower than usual, according to bankers.“Despite the downdrift in deposit rates, aggregate deposit growth is rising, both term and savings,” said Radhika Rao, India economist DBS Bank. “This might be driven by both an interest to lock in prevailing rates (especially term deposits) as these returns are expected to recede further. Also, depositors are preserving funds due to worries over income or employment risks,” she said.
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Mumbai: Investors are warming up to corporate bonds again, after a temporary freeze following the sudden closure of half a dozen mutual fund schemes by Franklin Templeton.Yields for papers of Power Finance Corp, REC and Housing Finance Development Corp have plunged as much as 35 basis points (bps) since June 8, the day the government lifted most of the restrictions on economic activities, leading to demand revival, and as a further reduction in interest rates appears imminent.Falling bond yields mean higher prices for the papers. The difference between the yields of the benchmark bond and the papers of top-rated public-sector companies has narrowed by about 15 bps to 70-80 bps in the past fortnight.“Demand rise coupled with shortage of papers has triggered yields to drop,” said Ajay Manglunia, head of fixed income at JM Financial. “Economic activities have begun to pick up since unlocking, which, in turn, is resulting in a demand revival for papers.”Lower availability is also helping. “This month’s issuances are relatively less than the preceding two months,” he said.A 10-year sub-debt series (where the risk is higher than usual corporate bonds) of REC yielded 7.6 per cent on June 19 in the secondary market compared with 7.95 per cent reported on June 8, show data compiled by JM Financial. Other REC papers of similar maturities are now yielding 7.48 per cent, 20 bps lower. PFC bonds changed hands at 7.41 per cent, 32 bps lower than the level two weeks ago.Residual maturities of bonds of these companies would be different.“There is a chase for higher yields among investors with rates falling at the shorter end of the curve,” said Sandeep Bagla, associate director at Trust Capital, referring to rate cuts by the central bank. “Fund houses are now regaining monthly inflows in the corporate bond funds.”Companies had raised Rs 1.63 lakh crore in the first two months of fiscal 2021 — more than double the same period last year and nearly four times of April-May in FY19 — as rates plunged to a record low and banks went slow with loans, ET reported on June 4. In June, primary bond sales are estimated to be about Rs 45,000 crore.“Dropping yields will help borrowers tap the primary market at lower cost,” Bagla said.HDFC bonds yielded 15 bps lower than the previous levels, although the secondary market deal on Friday will likely be reported only on Monday, dealers said.Bonds of National Bank for Agriculture and Rural Development traded about 10 bps lower in the past two working days.“Investor apprehensions arising out of a mutual fund event have abated,” said Badrish Kulhalli, head of fixed income at HDFC Life Insurance. “Institutional funds are now buying amid rising assets under management. This has also added to the demand for top-quality papers.”Closure of a few mutual fund schemes from Franklin Templeton in April had fuelled concerns among investors and had led to outflows from debt funds. These outflows have eased now.
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Mumbai: Several micro-cap stocks, which remained mostly dormant for over two years, have seen a sudden resurgence in activity from the beginning of April. The unexpected interest in these stocks has got little to do with their prospects, which in fact, have got bleaker amid the downturn.So, what is driving these stocks? With people being confined to their houses during the nationwide lockdown, several of them are finding time to test their fortunes in the stock market. While for many of them day trading is a way to escape boredom, it is the loss of jobs and salary cuts that may have prompted others to punt on the markets. Majority of the trading is happening in shares of companies whose market capitalisation is around 500 crore or lower, which most seasoned investors would not touch with a barge pole at this juncture.“Most of the newcomers in the market are either bored sitting at home or with no income. This category is trying their luck by trading in unknown stocks to make a quick buck,” said investor Vijay Kedia.76502580Nearly 300 micro-cap stocks have seen sharp jumps in prices and volumes since April 1. For instance, the daily average volumes of Opto Circuits, which has a market cap of Rs 369 crore, have risen from 46 lakh shares between January and March to 2.3 crore shares since 1 April, with stock price surging from 1.77 on 1 April to 12.25 recently. Andhra Cements with a market cap of Rs 222 crore has rallied 367 per cent since April 1 and seen a 470 per cent jump in daily average volume compared to January-March period. Similarly, shares of Ruchi Infrastructure, JMT Auto and Aayush Food have jumped multifold in the past couple of months.The record 20 lakh new demat account additions at retail brokers between March 1 and May 31 are evidence of appetite among smaller traders. The surge in activity has resulted in the rise of micro-cap and penny stock recommendations by various independent stock advisors, promising as much as 20 per cent in less than a month.“There is a sudden move in penny stocks, something which one should avoid,” said Sunil Singhania, founder, Abakkus Asset Manager LLP. “These stocks will give you a near-term thrill but it is like a roller coaster, ultimately these stocks have to go down.”Some of the leading online brokerages have now banned trading in penny or illiquid stocks. Online brokerage Zerodha last month has blocked new purchases in all illiquid penny stocks and illiquid option contracts that they believe can be used for executing trades to create losses, both by phishers and advisers.Prakarsh Gagdani, CEO, 5Paisa.com also said that they don't allow to trade on penny stocks now. “We only allow 60 per cent of exchange approved stocks to trade in both intraday and delivery segments.”Currently, BSE has classified 703 stocks under Graded Surveillance Measure (GSM) which is aimed at checking whether the recent advancement in their stock prices or volumes was commensurate with their financial health and fundamentals.Another 43 companies including Escort Finance, Jet Airways, Punj Llyod, Supreme Infra, TCI Finance, Videocon Industries among others will shift to GSM from June 29. Both the bourses have advised their trading members to exercise additional due diligence while trading in these securities either on their own account or on behalf of their clients.“Trading without understanding the underlying risk can not only destroy their income but also lives as seen in its most extreme form in the past,” said Kedia.
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NEW DELHI: India is looking to plug loopholes as it seeks to reduce import dependence on China. The routing of Chinese goods to India through their common trade partners, inversion in duty structures and the exploitation of ambiguities in origin rules have all come under the government’s scanner, said people with knowledge of the matter.The commerce and industry ministry is putting together details of the installed capacities of local industry for goods that India trades under free trade and bilateral agreements, and products which face issues related to inverted duty structures.The exercise is to check if these agreements are leading to preferential rates being lower on finished products than the intermediate or raw material.Especially on the radar are the trade arrangements with South Asian countries under the South Asian Free Trade Area (SAFTA), the Asean group, and bilateral pacts with Singapore, Japan, South Korea and Sri Lanka, with a focus to plug gaps that aid imports from China. India suspects China is routing goods through these countries, taking advantage of the trade pacts. 76501545The only operational trade agreement linking India and China — the Asia Pacific Trade Agreement, or APTA, (formerly Bangkok Agreement) — is also under scrutiny. South Korea, Bangladesh, Laos and Sri Lanka are also members of this grouping.“There is a suspicion of circumvention of free trade agreements (FTA) and Chinese goods entering through these routes violating rules of origin norms,” said an official. Under-invoiced imports from China too will be scrutinised.There was a sudden spurt in imports from Singapore, Japan and the Asean countries in 2017-18, and inbound shipments have been high since then. India’s trade deficit with China was around $47 billion in the first 11 months of fiscal 2020. “China has been pumping investments in Vietnam and its imports into India are coming unchecked, that too at low duty, through such countries,” said an industry executive.Source Problem Most of India’s exports to China have been of primary goods and raw materials including petroleum products, organic chemicals, iron ore, cotton and plastic raw materials, while imports have been mainly intermediate and finished goods such as telecom instruments, electronic components, consumer electronics, active pharmaceutical ingredients and machinery.While correcting the inverted duty structure in dual-use products such as steel may be difficult, experts suggested empowering customs officials to detain unnecessary imports but paying demurrage in cases where import substitution is key, could be helpful.“We are looking at ways to curb the import surge as this cripples the domestic installed production capacity,” the official said, adding that this would be done using all kinds of tariff and nontariff instruments such as antidumping duty, countervailing duty, safeguard duty and qualitycontrol measures.The issue has compounded as China has granted deeper duty cuts to India’s competitors including Peru, Pakistan, Australia, South Korea and Asean in its FTAs with them, which has displaced some of India’s exports.“One can only imagine the plight of our domestic industry had India joined the Regional Comprehensive Economic Partnership. Even thinking of these measures would not have been possible in that case,” said a Delhi-based expert on trade issues.
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