Tuesday, 19 September 2017

Gold might fluctuate towards $1260 per troy ounce

The price of gold has declined steadily after touching $1357/troy ounce in early stages of September due to the risk aversion on North Korean tension. The reason is the ballistic missile of North Korean missile test failed to shore up the safe-haven demand .due to which yellow metal has triggered very badly. The current rate of yellow metal is at &1309/troy ounce.

Readers should take into their account that gold's decline came despite a weakness in the dollar id dollar comes back into its original position it would add to the selling pressure. Gold till yet has not reached the bear market which could push the selling momentum of the yellow metal as low as &1256/troy ounce.

HPCL plans to invest Rs 61,000 crore in 5 years

State-owned oil marketer HPCL is planning to invest Rs 61000 crore over the next 5 yrs to scale up its business operations to tap the huge energy demand in the country. From the past one year, the company's shares have risen up to 70% in between the talks of its merger with ONGC. The government had approved the sale 51 percent equity stake in HPCL to ONGC on July 19. Minority shareholders in HPCL may not gain or lose much from the deal, apart from the gain or loss in the share prices, as the deal will be exempt from the mandatory open offer required in cases of acquisition of more than 26 percent equity stake. HPCL owns and operates two major refineries producing a wide variety of petroleum fuels and specialties, one in Mumbai (West Coast) of 7.5 million tons per annum (MMTPA) capacity and the other in Visakhapatnam (East Coast) with a capacity of 8.3 MMTPA.

5 key reasons to choose an ELSS fund

Unlike other instruments like PPF, NSC, and Long-term deposits, an ELSS is a long-term wealth creator due to consistent equity exposure. Equity investors are usually more cautious about losing money in the market. Investors who are smart enough are cautious about saving money and investing it from a longer-term perspective. ELSS is a kind of mutual fund scheme that invests a majority of its corpus in an equity-related product.
ü  Tax benefit- Your returns form ELSS become tax-free. Indian government provides the tax rebate for the equity-linked saving scheme (ELSS) u/s 80C of Income Tax Act 1961. You can invest into ELSS and deduct up to Rs 150000 from your taxable to effectively reduce your tax liability.
ü  Lock in a period- Good mutual fund portfolios are constructed for long-term investment. ELSS funds are locked for at least 3yrs. This inculcates a good habit to stay invested for a longer period.
ü  Ride the long-term value growth- The lock-in period for ELSS is 3 yrs you can the continuous growth of your fund for longer or redeem after 3yrs. But since these funds invest your fund in equity you own greater chances of higher returns with tax exemption.
ü  Inbuilt saving habit- ELSS scheme allow you to invest systematically with as low as Rs 500/month and slowly and gradually your savings into your investments and the best part of ELSS will be exempted from your tax returns.

ü  Opportunity to invest in equity while saving-  ELSS allows you the benefit of equity mutual fund schemes ride the growth cycle of stocks in your ELSS portfolio. In rising economy like India, a good portfolio with quality stocks may reap higher returns.

Monday, 18 September 2017

Nifty 19.09.2017

USD/INR likely to settle in the range of 64-65 in the coming term

The USD/INR currency pair is between 64-65 in the near term according to the forecasts by Commerzbank.Q2 2017 current account deficit is on the peak in 4yrs to USD14.3bn (2.4% of GDP)
The headline appears quite shocking but the details give the positive tone. These include the blowout mainly due to rise in gold imports which is in front of GST roll-out in July to over USD11 billion from bottom USD4 billion a yr ago. The trade deficit consequently reached at the peak over USD41 billion from under USD30 billion in Q1 but it should be moderate for the entire year.
Secondly, services continued to post positive inflows at USD18.2 billion and higher than a year ago, net foreign direct investment (FDI) which is double from a year ago to a healthy USD7.2 billion. This is a positive news for INR in that the funding is less speculative and longer term in nature and net portfolio inflows remained robust at over USD12bn, particularly to the debt market.

If global liquidity is withdrawn at a higher pace this risk needs to be watched. In other words, we don't need twin deficit that was concern of 2013

Government to sell Air India properties owned by them

Civil aviation minister Ashok Gajapathi Raju met finance minister Arun Jaitley on Thursday to decide the process where Air India is planning to sell its properties and land parcels across the country. Sources privy to the discussions say the idea is to sell real estate assets in cities, airport locations, and airline offices at prime locations. "Air India has a vast bank of immovable properties, which have been accumulated over a period of time at various locations in India and abroad. Some of the properties are lying unused for a long time.

Air India has a total debt of Rs 46,570 crore. Of the total debt, around Rs, 16,000 crore is on account of aircraft loans, which were raised partially from Export-Import Bank of India, foreign institutions and through non-convertible debentures. The aircraft loans are guaranteed by the government. The remaining is working capital loan raised from a consortium of 25 banks led by State Bank of India. Air India performance has been good in terms of pure operational metrics over the last two years has done well. The debt issue has pinned them down; selling off non-core assets can be used to retire some of the debt burdens

Elucidate NAV myths

The NAV of mutual fund has not been correctly understood by a large section of the investing community. And this can be easily seen from the fact that Mutual Funds had been recently collecting huge entity in their New Fund Offers or NFOs whereas the collection in the present schemes was minute. In fact, investors sold their present investments and invested in NFOs. This switch makes no sense unless the new fund has something different and offers you something new.
Meaning about NAV
Net Asset Value or NAV is the sum total of the market value of all the shares which are contained in the portfolio including cashless the liabilities, divided by the total number of units outstanding.
Misapprehension about NAV
This situation arises from the perception that a fund at Rs10 is a cheaper than say Rs 15 or Rs 100. However, this perception is absolutely wrong and investors would be much better off once they appreciate this fact. Two funds with the same portfolio are same no matter what their NAV is all about. NAV is immaterial. People carry this perception because they assume that NAV of an MF is similar to the market price of an equity share, which is completely false.