What RBI clarification means for crypto industry

“We are looking for some guidelines from the government to further help the industry go forward in the right direction,” says Nischal Shetty, Founder & CEO, WazirX. The Reserve Bank of India said on Monday that banks cannot refer to its April 2018 circular – struck down by the Supreme Court in 2020 -- to caution customers about trading in cryptocurrency. For those who use your platform, what happens next? It is definitely a welcome move. Until now, quite a few banks were not clear about RBI’s stand on the old circular of 2018. Now that the RBI has clarified it, that should bring a lot of clarity amongst the banks as well. We have been talking to a lot of banks. They were on the fence on whether they could service the industry or not. The latest RBI notification makes it clear that the circular was set aside by the Supreme Court on March 4, 2020 and it asks banks to do due diligence. Due diligence is a welcome move because as an industry, all the exchanges already do the KYC/AML and all the things that are necessary before providing services. It is a very positive move for the sector. How are you looking at the RBI circular in light of the upcoming law on crypto currencies that the government is set to bring?The entire industry is waiting for the law. Recently there were reports that the government is trying to set up a new committee that would look at crypto all over again with the intention of looking at them as assets rather than currency. This again is something that as an industry we have been pushing for, because the majority of the crypto that exists today are classified as assets or utilities and not currency. That again aligns with what the crypto industry has been pushing for in terms of regulations in India. Now combine that with the fact that in the last six months India has seen people entering crypto in millions. I think it is just a matter of time before positive regulations come in but before regulation, some guidelines could be set because it is going to take a while before regulations set in. We are looking for some guidelines from the government to further help the industry go forward in the right direction A lot of users could not make transactions. Have you been able to fix all of that? Are you expecting a surge in traffic?Week on week and the last two to three weeks have been tough for the industry due to the banking issues. In the next week or two, we will understand how many banks really open up to the industry. We have already started getting messages from different parts of the banking sector to clarify and understand this circular as well. In the next couple of weeks, we are going to see a lot of positive movement for the industry and from our product as well. The banks have to update their compliance teams and provide the much needed access to the crypto exchanges as well as crypto holders. What kind of talks are going on?One of the biggest hindrances was that they did not know what the RBI’s outlook would be. The latest notification clarifies that. The second was what sort of due diligence do crypto exchanges in India follow? What sort of compliance checks do exchanges comply with and work towards? We have been closely working with the different departments in various banks to show them how we do KYC/AML compliances and we will have to continue working towards that as an industry because this is an unregulated industry and it just becomes more important that we follow all the existing guidelines for the finance sector even if there are no regulations for the sector. It is important for us to follow these and as exchanges we are already doing that.

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World’s top ports expects delays on Covid outbreak

One of the world’s busiest ports could see shipments delayed as a Covid-19 outbreak that earlier closed part of the facility spurs stricter virus-control measures.All cargoes leaving Yantian Port in China will require reservations, according to a port employee, who declined to be identified as they’re not authorized to speak to the media. The port has strengthened its Covid-19 testing program for imports and cargoes into China could also be delayed, the employee said when asked whether vessels arriving at the port could be interrupted.Yantian Port in the export and industrial hub of Shenzhen in southern China had temporarily stopped accepting containers for export until Sunday May 30, according to a notice posted Friday on Wechat. The container yard of the port has been partly shut since last week after an outbreak of Covid-19 among port staff and in the broader community, state media reported.Yantian is one of the busiest ports in the world, with a cargo throughput of 13.34 million twenty-foot equivalent unit in 2020, a standard measurement used in freight industry, according to figures from the Shenzhen Transportation Bureau. It serves about 100 ships a week, according to a report on a Shenzhen government website.Shares of Shenzhen Yan Tian Port Holding Co., the operator of the port, slid as much as 1.8% on Monday. Calls to the company’s offices went unanswered.The disruptions will continue into the coming week, with shipping firm AP Moller-Maersk A/S reporting delays in its schedules due to the closure. Any delays will likely put further pressure on the already sky-high costs of shipping goods from China, which have soared on record export demand, a shortage of containers, and other factors.Those shipping costs are just one of the factors boosting the price of China’s exports, which are threatening to further fuel global inflation.

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J'khand CM writes to PM seeking free vax for 18+

Jharkhand Chief Minister Hemant Soren wrote to Prime Minister Narendra Modi on Monday and sought free Covid jabs for the 18-44 age group, saying the state was unable to incur nearly Rs 1,100 crore on it due to stressed resources.Soren said the state was battling a deadly second wave of COVID-19 with its limited resources."The financial burden on the state for vaccination of the age cohort of 18-44 years is likely to be more than Rs 1,100 crore considering 1.57 crore eligible beneficiaries. With vaccine being available for age cohort of 12-18 years and below, the mentioned financial burden will further increase by around Rs 1,000 crore. It will be extremely difficult to spare as much resources from the resource pool of the state which is already stressed during Covid times," the letter mentioned.He said the abysmal supply of vaccine as compared to the state's requirement is the foremost impediment to the ongoing vaccination drive.Terming the mandate for states to procure medicines against cooperative federalism, Soren said, "This is probably for the first instance in the history of independent India that the states have been mandated to procure vaccines on their own."Such a mandate, under the challenging and unprecedented circumstances where the entire nation is struggling for over a year, stands against the principle of cooperative federalism, he said.Soren said with the emergence of the second wave of COVID-19 in the country, the state experienced an unexpected outbreak of the pandemic and existing medical infrastructure of the state was put under unparalleled strain.He mentioned that it is now well established that timely and full vaccination of all the eligible beneficiaries is the only sustainable measure against the spread of COVID-19 infection and to control mortality on account of it."Better preparedness and response to a possible third wave in the near future will hinge on the extent of vaccination coverage across the country. The State of Jharkhand is taking all possible measures to ensure maximum coverage in the least possible time frame," he said.Stating difficulties in procuring vaccines, the chief minister said as mandated by the central government, Jharkhand is putting all efforts to procure COVID-19 vaccine directly from the available manufacturers for the age cohort of 18 to 44 years."However, the supplies against the orders placed continue to remain extremely limited and it ultimately depends on the allocations made by the central government. On account of scarce supplies, the overall pace of vaccination is not as desired and defeats the very purpose of vaccination drive for this age cohort," he stressed.Further, Soren mentioned that Jharkhand like other states has always received vaccines free of cost from the central government for pulse polio and routine immunisation.Also, he said that rates specified by the central government for procurement of vaccines by the state for the age cohort of 18 to 44 years are significantly higher than the rates at which vaccine is being procured by the central government for the beneficiaries in the age cohort of 45 years and above."This dichotomy will not stand the scrutiny of reasonable classification under the fundamental principles of the Constitution of India," Soren who earlier hit out at PM Modi for "launching vaccination drive without preparedness" said."Further, the inherent diversity in our country creates various peculiarities specific to the states concerned. Every State has its own high risk groups depending on the geographical, cultural and traditional heterogeneity. As such, a common framework defined by the Central Government with regard to prioritizing of beneficiaries across the country is not desirable," the letter mentions.Urging the PM to provide to the State free vaccine for beneficiaries of all age groups and also give freedom to define priorities for vaccination coverage, Soren said this would help the state in achieving the target of full vaccination in a timely manner which would go a long way in ensuring effective tackling of the anticipated third wave.He said the State and the people of Jharkhand shall be ever grateful for support under such difficult times.Facing delay in vaccine supplies, Jharkhand which could not launch vaccination drive for 18-44 age group on May 1 ultimately launched a free drive on May 14 but has been stressing on constraints in supply.Hitting out at the Centre on vaccine distribution, the CM in an interview to PTI on Sunday had said a state like Jharkhand has almost exhausted doses for people in the 18-44 years age group.Accusing the Centre of "no transparency in vaccine allocation", Soren said under the circumstance he was left with no other option than to appeal to the companies operating in the state to come forward for vaccination of communities in their areas.Jharkhand's COVID-19 tally soared to 3,36,943 on Monday as 703 more people tested positive for the infection, while 19 fresh fatalities pushed the state's coronavirus death toll to 4,977.

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Centre issues notice to ex-Bengal chief secretary

Even though West Bengal chief secretary Alapan Bandyopadhyay on Monday opted to retire on the day of his superannuation, the ministry of personnel issued him a show-cause notice for not reporting to the department of personnel and training (DoPT) here this morning, as directed by in Friday's order placing his services with the government of India. According to sources in the government of India, a chargesheet may be issued against the retired chief secretary followed by disciplinary action. The show-cause notice sent to Bandyopadhyay on Monday is said to have pointed out his failure to present himself at the DoPT office in North Block at 10 am on Monday, and asked why disciplinary proceedings should not be initiated against him for having defied the Centre's directions in alleged violation of service rules. Sources indicated that Bandyopadhyay can respond to the show-cause notice, explaining that he could not report to New Delhi at the appointed hour as the West Bengal government did not give clearance to his New Delhi trip."This would be a completely valid and acceptable explanation," former secretary, personnel S K Sarkar told TOI on Monday. He added that since the West Bengal government was Bandyopadhyay's cadre controlling agency, its approval was mandatory for him to travel to New Delhi to report to DoPT.Central government sources indicated that disciplinary proceedings may still be initiated against the retired chief secretary and a chargesheet served to him. A government functionary said: "The chief secretary's retirement shows that Mamata Banerjee is on the backfoot. She knows that the facts of the matter are against the chief secretary and this is a last bid to save him...Banerjee has done a big U-turn in a matter of hours. From requesting the PM to confirm the extension of chief secretary for 3 months, to retiring him now. But this move doesn't change anything. Chargesheet will be issued and disciplinary action will be taken against Alapan Bandyopadhay".Disciplinary proceedings can be initiated against an officer for up to four years after his/her retirement, as per rules. However, a senior bureaucrat argued that as per All India Services (Discipline and Appeal) Rules, 1969, the competent authority for issuing the chargesheet in this case would be the West Bengal government, since it never relieved Bandyopadhay. Yet, some cite Rule 6(1) of IAS Cadre Rules to underline that the Centre's word on deputation of an officer prevails in the event of any disagreements between the Centre and the state government concerned. The aggrieved officer can always escalate the matter to the Central Administrative Tribunal or the High Court. Disciplinary action, which will have to follow due process including giving the officer a proper hearing, may involve a minor or major penalty. For an officer who has already retired, it may impact his post-retirement pension and other benefits.

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6 money habits we have to change now

Covid has forced us to look at some aspects of life afresh. For many people, the financial fallout of covid has brutally exposed the fragility of their personal finances. Salary cuts and job losses have left many scrounging for cash. Despite being asset-rich, some have struggled to arrange for liquidity to tide over a cash crunch. The disruption in income has blown away rosy calculations and ambitious goals. Borrowers have been unable to cobble together enough money to pay back hefty loans. Hundreds who have succumbed to the virus have not left behind a will, leaving families without access to assets. The message is clear: we must change our money habits and question preset notions of financial security. Many of us are set in our ways of dealing with money matters. Just as we revisit other facets of life post covid, it is time to refashion some of our saving, borrowing and investing habits. Not sure where to start? After speaking to financial advisers, we have zeroed in on a few areas that demand your immediate attention. Not all of these tweaks can be done overnight. Some habits may have to be phased out gradually. A new approach may take time to take shape. But over time, these tweaks should put you in a better position to deal with financial shocks.Always have ample liquidityThe pandemic has brought into focus the importance of having enough liquidity at all times. Simply having huge savings doesn’t count for anything if these are illiquid. Your prized real estate assets won’t come to your aid when in need of immediate cash. The lakhs stashed away in instruments with a lock-in will also be out of reach. Forget about getting your money out of traditional insurance plans either. It’s not at all wrong to have illiquid assets. But it is vital to have sizeable chunk of savings in assets that you can sell quickly on a rainy day. Vivek Rege, Founder & CEO, VR Wealth Advisors, says, “Investing all savings without providing for liquidity comfort will pose a serious problem when you desperately need the money.”You can ensure liquidity by setting up an emergency fund that is big enough to take care of 3-6 months’ expenses. Some experts say a nominal buffer of 3-6 months’ expenses may no longer be adequate. Prableen Bajpai, Founder and Managing Partner, FinFix Research & Analytics, asserts, “Emergency savings need a drastic overhaul in the face of prolonged threat to jobs and incomes. At least one year’s expenses should be kept aside for this.” Where should you invest your emergency corpus?Assumed expenses Rs 50,000 a monthOne year expenses will work out to Rs 6 lakh. Divide this into three time horizon buckets as follows 83056626Note: When providing for monthly expenses, cover all basic living expenses as well as any EMIs. SIP outflows may be excluded.The requirement may be even higher for those engaged in more vulnerable occupations with limited alternative work or for households where both partners work in the same industry. It is also important to review your liquidity position periodically. This buffer may be in the form of bank deposits or even open-ended mutual funds, apart from idle bank balance. Having enough liquidity comes at the expense of lower returns, but it’s a price worth paying. Don’t borrow future incomeThe ‘buy now, pay later’ philosophy has got a rude jolt. Amid salary cuts and business disruptions, many individuals and households who borrowed heavily are stuck in a quagmire. Some are unable to repay the loans while others are left with little savings after servicing hefty EMIs. For many, the issue is of borrowing more than they can afford. When taking on a big loan, most borrowers make rosy assumptions about future income. Even if the loan or outlay seems out of comfort zone now, many surmise that a rising income trajectory will make it more affordable down the line. This logic often dictates the spending itself: Why not shell out a few lakhs extra for the roomier 3BHK even when a compact 2BHK would suffice? In lieu of the hatchback, what is a few thousand more rupees in monthly EMI for that swanky new sedan? It is this premise of borrowing from future anticipated income that can spell disaster. This thinking has to be revisited as shocks can disrupt the best laid plans. Rege cautions, “Don’t fool yourself with false optimism regarding the future. It often drives lifestyle changes that can be painful to reverse later.”Any loan decision must be taken on the basis of prevailing circumstances. The thumb rule is that all EMIs should not add up to more than 50% of your current income. Also, don’t take a loan just because it is available. If your EMIs gobble up too much of your income, other critical financial goals, like saving for retirement or your kids’ education, might get scuppered.Stress test your debt burdenBefore taking a hefty loan, consider the undesirable scenarios that may play out in future.Inflation rate assumed at 5%, normal income growth at 5% 83056672 83056681A buffer beyond health plansAmid the spate of hospitalizations, thousands of sufferers have found out the hard way the inadequacy of their mediclaim plan coverage. Insurers are refusing to pay higher than prescribed rates charged by private hospitals or cover the cost of overhead consumables like PPE kits and sanitization equipment—accounting for a chunk of covid hospital bills. With several instances of claims being denied or settled only for partial amount, policyholders have had to pay for expenses themselves. An analysis of official data shows that insured are shelling nearly 40% of the treatment costs from their own pocket. Many have even been denied cashless settlement—policyholders are being told to pay the full amount and file the reimbursement later. 83056744Clearly, your mediclaim cover may not fully cushion the blow from medical exigencies. This is a reality not merely restricted to the abnormal circumstances of the ongoing pandemic. With multiple exclusions and clauses like co-pay or sub-limits within health plans, policyholders are always at the mercy of the policy fine print. Think a Rs 25 lakh or higher policy will cover all expenses? Even those with large-sized covers are never fully covered for all expenses. Policyholders must henceforth put in place extra financial buffer even if covered by a health plan, financial planners say. “It is a good idea to have extra cushion in place for medical exigencies that goes beyond what is covered under your health plan,” contends Bajpai.Write will, update nomineesThe pandemic has claimed victims across age and class divides. Many of these were breadwinners who left behind assets, but no written wills or nominations. Bereaved families have to fend for themselves without immediate access to their own household assets. There is a clear lesson in this. Preparing a will cannot be a task kept aside for later years. If you have dependents, execute a will or at the very least, make sure to have nominations in favour of your loved ones at the earliest. Save them the drudgery of running from pillar to post claiming their rightful assets in case of your untimely demise. Not having sufficient assets yet should not stop you either. “You can still create a will covering whatever assets you own today and update it over the years as and when you accumulate more,” exhorts Tarun Birani, Founder and Director, TBNG Capital Advisors. This follow-up is critical. Make sure to update the will at regular intervals. This may be through a codicil for minor alterations or executing a fresh Will for bigger modifications. Besides, at all times, keep a trusted, responsible family member informed about the existence and location of all important financial documents.Cover big-ticket liabilitiesWith the death of the breadwinner, many families now face the burden of repaying outstanding loans. This has exposed another gap in people’s borrowing habits. When opting for large ticket size loans, it is not enough to have a roadmap to repay. Buy a term insurance cover equal to the loan amount to protect your family from shouldering the burden of repayment in case of your untimely demise. If you are taking a large home loan, opt for a term plan linked to the home loan or a separate cover. This has to be over and above any existing term plan that covers your family’s future income needs, insists Bajpai. It will ensure proceeds from the existing policy don’t go towards paying off the loan, leaving your family exposed. The worst scenario is when the family occupies the house mortgaged in the name of the deceased, but not covered under a term plan. “Covering your liabilities through a term plan will ensure the asset can come into the possession of surviving beneficiary easily after outstanding balance is paid,” asserts Rege. In case of a term cover bundled with the loan, the coverage reduces in direct proportion to the outstanding loan. The one-time premium amount is embedded in the EMI. However, it is advisable to buy a separate term plan. The premium for a linked term plan is usually higher, even if not visible upfront. Further, you cannot hike the cover amount under a linked term plan in case you opt for a top-up loan. You will have that flexibility with a separate term plan.Go beyond domestic marketIndian investors have traditionally piggybacked entirely on the India growth story for wealth creation. While this has served investors well enough, the pandemic and its economic fallout should force a rethink of domestic bias. Experts reckon it is high time Indian investors look beyond the country’s borders for investing ideas. International equities can no longer be treated as an exotic indulgence but an integral part of one’s asset allocation, feel financial planners. 83056768 The inherent strength of developed markets has been amply evident in the post-covid global environment. Economies like the US, UK, Germany, among others have shown fast recovery amid swift healthcare response and hefty economic relief packages. Viraj Nanda, CEO, Globalise India, argues, “More than any other point of time, covid has demonstrated how countries respond differently to adversities. This feeds into the respective markets. Geographical diversification is therefore a must to mitigate country-specific shocks.” Beyond this, other countries have specific strengths and expertise that are unique to each. This allows for investing opportunities that simply do not exist in Indian companies. 83056783 However, this allocation to foreign equities cannot be merely cosmetic. Investors must participate more meaningfully in foreign equities. For it to truly afford required diversification and contribute to wealth creation you need to give it enough heft in your portfolio. Any allocation less than 10% of your total corpus will not materially make any difference, even when it is the best performer in your basket.Experts maintain that 15-20% allocation will provide enough diversification. But this can’t happen overnight. “Start with small steps, build enough comfort and familiarity with foreign markets and gradually work towards that allocation,” says Nanda. This may be through equity funds investing across global equities or dedicated to US markets or even individual bets in foreign stocks.

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What happens if husband dies without a will

Given the uncertainty of life in the face of Covid-19, it is advisable to write a will if you have assets and want to pass them on to your family members smoothly. However, the urgency and importance of a will and nomination are not fully realised because no one believes it will happen to them.Especially vulnerable are dependants like children and homemaker spouses, who have stayed away from the entire process of financial transactions and wealth management. Women are typically unaware of their legal rights regarding property, let alone know how to access it. What should they do if their husbands die suddenly without a will? How is his property distributed and does it differ for women of different religions?1. Assets distributed as per law based on religionIf the husband dies intestate, i.e., without a will, the assets are distributed as per the law based on his religion. For Hindus, Jains, Buddhists and Sikhs, the distribution is governed by the Hindu Succession Act, 1956, and the Hindu Succession (Amendment) Act, 2005. For Muslims, the Muslim Personal Law (Shariat) Application Act, 1937, is applicable. For Christians, the succession is governed by the Indian Succession Act, 1925.2. In case of Hindu maleIf a Hindu man dies intestate, his property will be first distributed to Class I heirs. If there are no Class I heirs, the property will be given to Class II heirs. If there are no Class I or II heirs, the property will go to agnates (distant blood relatives of male lineage), and if there are no agnates, it will go to cognates (distant blood relatives of male or female lineage). If there are no cognates as well, the property will go to the government.Since the wife is included in Class I heirs, she will have a right to her husband’s property, but it will be shared with her children and mother of the deceased. If the widow remarries, she will not lose her right as an heir to the assets of her deceased husband.In case of husband’s ancestral property, the wife is entitled to a share from the husband’s share of property, but she has no right to claim partition. She will get her share as Class I legal heir during the partition of the property.3. For MuslimsUnder the Muslim law, a childless widow is entitled to one-fourth of the property of the deceased husband. However, if she has children or grandchildren, she will be entitled to one-eighth of the property. If there is more than one wife, then she gets one-sixteenth share in the property.4. For ChristiansOn the death of a Christian male without a will, the wife is entitled to one-third share of the husband’s property, while two-thirds will be shared among children. If there are no children, then the wife will get half the share of the husband’s property, whereas the other half will be distributed among relatives. If, however, there are no children or other relatives, the wife will be entitled to the entire property of the deceased husband.5. For unmarried couplesThough the Hindu, Muslim and Christian succession laws do not accept live-in relationships, the Supreme Court had ruled in 2015 that partners who have cohabited for an extended period can be considered married. Yet, the inheritance rights of women in such relationships remain sketchy.Also read: How a male's assets are divided under the Hindu Succession Act after his deathIf a Hindu male dies without a will, the father is not his immediate legal heirInheritance rights of women in own, husband's ancestral property, coparcenary propertyIf you have a wealth whine, write to us...All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write to us at etwealth@timesgroup.com with ‘Wealth Whines’ as the subject.DisclaimerThe advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.

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Navratilova sad for Osaka, says mental health gets short shrift

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Osaka crisis sends French Open reeling as Djokovic, Nadal begin title bids

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French Open chief 'sorry and sad' over Naomi Osaka withdrawal

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Hopes pinned on RIL's oil and gas biz: Ajay Bagga

There's no big traction in Reliance Retail's e-commerce business at present, says market expert Ajay Bagga in this interview. Edited excerpts:What could be the next trigger for Reliance going forward from here?The stock has been consolidating. The move right now is more because of its oil and gas business. The good numbers from public sector oil marketing companies have led to a re-rating of the entire sector. The expectation is that the oil and gas part should do better. Jio Platforms and the retail business are already valued to perfection. The Jio part will start taking off once there is an industry-wide ARPU hike, which has disappointed the market for the last two quarters. Until that happens, you are not going to see much on that part. E-commerce is still in the early days. There's no big traction. In retail, they are the biggest in India but that is valued already. So this is more about the waking up of a giant. Oil and gas is leading to this and there is also some good news from the exploratory and production side.Are we in for another strong month in June?Right now, the momentum seems to be pointing towards that. May was surprising, but the market factored in the plateauing of numbers in the middle of May. Financials were underperforming, in contrast to most of the world markets. May was a story of financials catching up to a large extent and we are expecting that to continue. There will be pain on the retail side, especially at the lower end. The collections of MFIs and lower-end NBFCs are suffering. Public sector banks have gone overboard on retail lending over the last two years. We are very much near topping out once more. Of course, people do not like to hear words of caution in a market like this. It is a totally asymptomatic market. It is not displaying symptoms of the economy or the health of the country. It is more about the flows and the hope trades. That should continue in June but we are getting near the top.Where do you stand on the entire metals debate? Are we in the middle of a structural bull run in metals?Clearly, the kind of run-up we have had this year has factored in most of the price gains that metals have seen. It is a super cycle. It comes once every few decades and lasts for at least three to five years. So we are not really seeing the end of it. The whole global economy is recovering, supply is not much higher than demand. As the demand increases, metal prices will increase further. I stay quite positive on them. For fresh positions, you can wait for dips to buy. Those holding positions will be well-rewarded after 1-2 years. As the global economy recovers and reopens, metals will be in demand.

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SIP best option for fundamental investors

Traders should stock to momentum strategies while fundamental investors should tread carefully in the market now, says Deepak Shenoy, Founder, Capital Mind. Edited excerpts from an interview:What is it that you are making of the market? New highs aside, is it time to tread with caution or would you say follow the momentum?If you are a momentum person, then this is a great time to be with momentum. Momentum is typically a short-term kind of strategy where you exit if the momentum leaves you. If you are a fundamental investor, you might want to still consider holding on or at least do an SIP kind of investment in this market rather than investing all at once. It is easy to say stay away but obviously the market itself is going up so fast that it almost seems silly to tell people that caution is warranted here. But in general, of course, the economy is very divergent from the stock market. We are seeing consumer spending drop very precipitously in the last two or three months.The Street is getting a little bit circumspect on metals. Credit Suisse has raised concerns about the price-to-book value that most of these steel stocks are trading at. Where do you stand when it comes to metals?Steel has a very different phenomena compared to most other metals at this point. The demand for steel is relatively little bit higher. China, one of the largest producers of the metal, is actively discouraging exports and therefore the disbalance between supply and demand has caused prices to go up. Results of steel companies have been good and will remain so for this quarter as well.However, steel is a cyclical and every few years the stocks flare up and capacities get added. We are seeing that right now. When the down cycle comes along, which is inevitable in steel, you are going to see a correction in terms of both results and stock prices. We may be closer to a peak in steel stock prices. The steel business cycle may still continue for a quarter or two more from here but stock prices may be closing in on a peak.You should play it the way momentum is played and focus on stock price. It is a cyclical business, so you would not want to get in at this point unless you really want to get out in a couple of quarters.How are you looking at PSU plays? Which ones do you believe merits attention at current levels?We are long BPCL but the problem right now is the lack of understanding of timelines. It was two-and-a-half years ago when they started talking about divestment. I do not think Shipping Corp or Concor have that kind of visibility yet. In terms of privatisation, I would say BPCL is a good step. We are seeing changes in some downstream companies. If BPCL divestment goes through well, I am sure we will see a lot more. We are betting on BPCL.

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Why Indian students are opting for overseas edu

Amid the upheaval caused by the second wave of the pandemic and predictions that the next wave may affect the younger population more, a large part of the Indian student community is looking overseas for college admission.Factors like access to vaccines, robust health infrastructure and policies favouring foreign student admissions are drawing student interest more than ever for international colleges, apart from the charm of attaining a foreign degree.Education platforms like Yocket, Collegify and Leverage Edu are seeing a more than 50% increase in students wanting to pursue higher education outside of India in 2021 compared with 2020.This is also due to pent-up demand since many aspiring students could not join colleges abroad last year due to travel restrictions as well as a surge in Covid-19 cases in several developed countries.“The number of students aspiring for foreign colleges is going up further with the improved situation in the US, UK and other countries. The US vaccination drive has brought a lot of confidence among students,” said Sumeet Jain, cofounder of education consultancy Yocket.The biggest hurdle for these students now is getting a visa due to the high number of Covid cases and lockdowns in India, and the delay in board examinations and results.A recent survey of 5,000 students conducted by higher education and career guidance provider Leverage Edu on its platform suggested that 94% of the students who had dropped plans to join an international college in 2020 were now reconsidering the plans in 2021.As much as 71% of undergraduate and post-graduate students looking to go abroad for higher studies consider better healthcare infrastructure as one of the key reasons for their interest.“The survey finding has led us to the conclusion that more than ever students are keen to study abroad this year,” Leverage Edu founder Akshay Chaturvedi said.Adarsh Khandelwal, founder of Collegify, another firm in the education space, is also seeing a steep rise in foreign college aspirants, especially for the US.All the colleges in the UK and US are taking precautionary measures including getting the foreign students vaccinated, thus building confidence among parents and students, Khandelwal said.Vaccine has played an important role in the augmented student interest this year. “We are certain that an absolute majority (more than 75%) have one eye on the ‘vaccine factor’ while applying. ‘Healthcare’ is now a living room conversation in everyone’s lives,” said Chaturvedi.Other factors like quality of air we breathe, previously little-understood points, have gained a lot of relevance post the second wave in India, he said.The undergraduate segment aspiring for international colleges is a fast-growing market for most admission experts and platforms in India.As per the Leverage Edu survey, 75% of students opted for the UK as the most favourable destination to study abroad, followed by Canada and the US. About 58% said they had made their plans in the last three months.“I have to stay in quarantine for 10 days in the UK, the healthcare system is good and vaccination is being done, so I am confident to travel there this year,” said Anmol Sahu, a student enrolled on the Leverage Edu platform, aspiring to join the University of Manchester or University College London.Of the students who opted for the UK as their preferred study destination, two-thirds said that country’s plan to vaccinate all international students would benefit incoming students.

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Delhi reopens a crack amid gloomy forecast

The Indian capital, which just weeks ago suffered the devastating force of the coronavirus, with tens of thousands of new infections daily and funeral pyres that burned day and night, is taking its first steps back toward normalcy.Officials on Monday reopened manufacturing and construction activity, allowing workers in those industries to return to their jobs after six weeks of staying at home to avoid infection. The move came after a sharp drop in new infections, at least by the official numbers, and as hospital wards emptied and the strain on medicine and supplies has eased.Life on the streets of Delhi is not expected to return to normal immediately. Schools and most businesses are still closed. The Delhi Metro system, which reopened after last year’s nationwide lockdown, has suspended service again.But the city government’s easing of restrictions will allow people like Ram Niwas Gupta and his employees to begin returning to work — and, more broadly, to start to repair India’s ailing, pandemic-struck economy. Gupta, a construction company owner, must replace the migrant workers who fled Delhi when a second wave of the coronavirus struck in April, but he was confident that business would return to normal soon.“Immediately we will not be able to start work, but slowly in six to 10 days we will be able to mobilize labor and material and start the work,” said Gupta, who is also the president of the Builders Association of India in Delhi.At least 1 million people in Delhi’s construction sector will be able to return to job sites.Even a small opening represents a gamble by city officials. Just 3% of India’s 1.4 billion people are fully vaccinated. Because of limited health infrastructure and public reporting, the state of the pandemic in rural areas — including some just outside Delhi — is largely unknown. Experts are already predicting a third wave while cautioning that the lull in Delhi may be just a respite, and not the end, of the second wave.Six weeks ago, the number of new cases in Delhi was soaring, reaching a peak of 28,395 new recorded infections on April 20. Nearly one in three coronavirus tests came back positive. Hospitals, full beyond capacity, turned away throngs of people seeking treatment, with some patients dying just outside the gates. Cremation, the preferred last rite for Hindus, spilled over into empty lots, with so many bodies burned that Delhi’s skies turned an ash gray.The nightmare in India’s capital appears to be over, at least for now, even as cases rise elsewhere in the country. The city reported 648 new cases on Monday, and about four-fifths of the intensive care unit beds were vacant.Officials in Delhi, and around India, feel a need to strike a balance between pandemic precautions and economic viability.On Monday, India released a new set of numbers that showed the country’s economy grew by 1.6% for the three-month period ending in March.But economists say those numbers, which reflected activity before the full impact of the ferocious second wave, are likely unsustainable in the near future.The Ministry of Statistics and Program Implementation also forecast that India’s gross domestic product would shrink by at least 7.3% over the financial year that began in April.Experts point to two main reasons: India’s prolonged lockdowns and its vaccination rate, which has fallen to just over 1 million doses a day now from about 4 million last month because of the country’s limited vaccine manufacturing capacity.Though the lockdowns have helped India slow the surge of infections, economists say restrictions might need to remain in place at least until about 30% of the country’s 1.4 billion people have received one vaccine shot.“We estimate that India will reach the vaccine threshold by mid- to late August, and, accordingly, expect restrictions will be extended into the third quarter,” Priyanka Kishore, the head of India and Southeast Asia at Oxford Economics, said in a research briefing last week. “Consequently, we have lowered our 2021 growth forecast.”She added that supply issues and vaccine hesitancy could prevent the country from reaching the 30% threshold by August, which could result in further economic decline.One economist said that the impact of the country’s shrinking economy would be even more pronounced in rural areas.“As things stand now, the scale, the speed and the spread of COVID has once again given a push back to the economy,” said Dr. Sunil Kumar Sinha, the principal economist at India Ratings and Research, a credit ratings agency. Dr. Sinha added that the country’s negative growth forecasts for the financial year were the lowest ever recorded.The lockdown that began easing on Monday was nowhere near as severe as the nationwide lockdown imposed by India’s prime minister, Narendra Modi, last year, which pushed millions of people out of cities and into rural areas, often on foot because rail and other transportation had been suspended. Modi resisted calls by many public health researchers, including Dr. Anthony Fauci, the director of the U.S. National Institute of Allergy and Infectious Diseases, to reinstitute similar curbs this year.But in a nod to the chaos of last year’s lockdown, throughout the second wave, core infrastructure projects across the country, which employ millions of domestic migrant workers, were exempted from restrictions. More than 15,000 miles of Indian highway projects, along with rail and city Metro improvements, continued.Most private construction sites, however, were closed down, placing workers like Ashok Kumar, a 36-year-old carpenter, in extremely precarious positions.Kumar usually earns 700 rupees, about $10, per day, but has sat at home idly for the last 40 days, unable to pay rent to an increasingly impatient landlord. He hoped to be vaccinated before returning to close quarters with other workers, but hasn’t been able to secure a dose at one of the city’s public dispensaries, which have closed intermittently because of vaccine shortages.“My first priority is my stomach,” Kumar said. “If my stomach is not filled I will die even before corona.”In a meeting with the city’s disaster management authority on Friday, Delhi’s chief minister, Arvind Kejriwal, said the lockdown would be eased in phases according to economic need.“Our priority will be the weakest economic sections, so we will start with laborers, particularly migrant laborers,” many of whom work in construction and manufacturing, Kejriwal said.Millions of people in India are already in danger of sliding out of the middle class and into poverty. The country’s economy was fraying well before the pandemic because of deep structural problems and the sometimes impetuous policy decisions of Modi.Public health researchers in India generally approved of the Delhi government’s approach to lifting its lockdown, but cautioned that the low infection numbers may represent a reprieve — and not the end — of the capital’s terrifying second wave.“It’s not a decision that can be questioned on the merit, but obviously they have to take the maximum care,” said Dr. K. Srinath Reddy, president of the Public Health Foundation of India.India averaged 190,392 reported cases per day in the last week, a drop of more than 50% from the peak, on May 9. The death toll also fell, though less precipitously, to 3,709 on Sunday. The overall toll of 325,972 is widely considered to be a vast undercount.As cases have fallen in Delhi, people have cautiously left their homes for evening strolls after the daytime summer heat has abated, or to pick up groceries from the normally bustling but now quiet neighborhood markets.Elsewhere in India, the pandemic is far from over. Cases are rising in remote rural areas that have scant health infrastructure.The state of Haryana, which borders Delhi and is home to the industrial hub of Gurugram, extended its tight lockdown by at least another week. And in southern Indian states where the daily case numbers remain high, official orders allowing manufacturing to resume have been met by resistance from workers.“It is a question of life versus livelihood,” said M. Moorthy, general secretary of the workers union at the Renault Nissan auto plant in Chennai.

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View: How to build a firewall with Indian features

India’s internet future — free and open, or stymied and controlled — may be decided by a 224-page lawsuit filed by WhatsApp last week.Saying that it wanted to curb fake news, revenge porn and other ills, Prime Minister Narendra Modi’s government introduced new rules in February that would compel social media platforms such as Facebook Inc.’s WhatsApp to trace chat messages, among other things.As the three-month deadline for compliance ended, WhatsApp filed its petition in the Delhi High Court. The U.S. company is arguing that being asked to track the originator of a message has no legal sanction. It doesn’t protect people such as journalists and political activists from arbitrary state action. Nor does the rule meet the proportionality test — required now by Indian law following a 2017 Supreme Court verdict — of being the least restrictive infringement of Indians’ fundamental right to privacy.WhatsApp contends that keeping a log of messages would require it to break end-to-end encryption and save billions of messages sent by its more than 500 million users in India.How the case is decided in the coming year or so as it winds its way to a verdict followed by an inevitable appeal may come down to the technical details of data transmission. Internet messages consist of two parts: the header and the payload. That unencrypted header, which can be read by any router it passes through, can be thought of as an envelope that shows identifying information, such as originating and destination IP addresses. The payload is the message itself. If it’s unencrypted, anyone can read it along the way. If it’s encrypted, then the message is scrambled using hard-to-crack algorithms.The government says that fingerprinting each and every message — making it traceable — doesn’t include the content. But WhatsApp pleads that it will still undermine E2E encryption, posing a serious risk to privacy, and would open up WhatsApp (and other chat apps like Signal) not only to government interference, but also to hacking attacks.The rules require significant social media intermediaries to appoint a compliance officer, a grievance officer and a 24/7 contact person, something they’re grudgingly accepting. Facebook itself has fallen in line. Alphabet Inc. and its Google unit “always respect local laws in every country,” Chief Executive Officer Sundar Pichai said, according to India’s Economic Times. Twitter Inc. has asked for a three-month extension.But traceability is a bigger battle, and WhatsApp was prepared for it. As the news website The Morning Context noted, India’s digital intermediary rules look a lot like those passed by Brazil’s Senate in June last year. That bill, PLS 2630/2020, more commonly known as the Fake News law, required companies to store “massively forwarded” messages, with the complete chain of communication, for three months. The Indian version doesn’t stipulate a holding period, nor is it restricted to messages going viral. Even if the payload stays encrypted, enormous, forever archives would be of limited use. Simply taking a screenshot or copy-pasting a message would start the chain from scratch.The bigger concern for India is not that the Modi government is taking a leaf from Brazil’s playbook, but that it’s dragging the country backward to the China of 2006. That’s when Beijing was powering up The Great Firewall, a mammoth project that would prevent outside information from flowing into the nation and allow authorities to control what was shared internally. The result has been an exit from the world’s largest internet market by some of America’s biggest names, including Facebook, Google and Twitter.Those same companies now see India as the next big hope. With plenty of growth ahead, not only for content but also e-commerce and digital payments, none want to be left out. Where the People’s Republic had the resources to build the firewall itself, and later rely on companies to self-police, India may need domestic business interests to do the job. In the name of a responsible internet and protecting citizens from data imperialists, several will be eager to abet the government in soft censorship. Keeping global tech firms out — or forcing them to accept a subservient role — may help Indian capitalists build their own consumer-centric empires.New Delhi will be able to ensure that digital communication platforms are popular but docile, amplifying the government’s messages without questioning propaganda or exposing state hypocrisy. Long-time China watchers will be familiar. Last week’s raid on Twitter’s New Delhi and Gurgaon offices, after the service labeled a tweet by a ruling party member as manipulated media, serves as a warning.After failing to keep their foothold in China by going it alone and making the case for an open internet, Western firms will try hard to not lose the only other market of more than a billion people. Both Facebook and Google signed up last year for the $20 billion-plus fund-raising spree by Jio Platforms Ltd., petrochemicals tycoon Mukesh Ambani’s digital business. Apart from lobbying for saner rules and seeking legal recourse, teaming up with India’s richest man seems a decent strategy.Amid the various pushes and pulls, India may end up somewhere between a Chinese-style firewall and a Western model of free internet. The fate of WhatsApp’s legal challenge will go some way in tracing the landing spot.

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ETFs and index funds. Which one is a better choice?

As with everything in life, there are some things that you actively participate in and some others where you are passive. Active participation is when you are directly engaged and involved in the outcome. Passive participation is just the opposite, wherein you observe the proceedings without directly influencing the activities or their outcome.When it comes to investing, the same principle applies. You can actively invest in specific stocks and create a portfolio or you can just invest in a basket of stocks selected by someone else using pre-determined rules. Some of the foremost amongst such investments, are ETFs and Index Funds. Both these asset classes originate from the same family of passive funds, which mirror the Index that they follow. They both aim to track the performance of the underlying Index as closely as possible.Index Funds and ETFs are categorised under what is known as "Indexing." Indexing involves investing in stocks of an underlying benchmark index on the same proportion and mirroring the portfolio. By being passive in approach, these instruments do not aim to beat the market or even the underlying Index they follow.While ETFs and Index Funds are similar, there exist certain subtle differences. One of the key differences between them is that, unlike Index Funds, ETFs are listed on the exchanges, and an investor can invest in them at real-time NAV. On the other hand, an Index Fund is like any other mutual fund and one can invest in them without having demat account at the end of the day NAV.Both Index Funds and ETFs have high levels of transparency as they cannot deviate from their chosen Index. ETFs offer daily portfolio disclosure. As an investor, you can choose to directly trade in ETFs on the stock exchange in small amounts. However, for investments upwards of certain amount, usually above 30 to 50 lakhs, you will need to go through an AMC. In the case of Index Funds, NAV is determined at the end of the day, and portfolio disclosures are either daily or monthly. Investing in Index Funds is akin to investing in any other mutual fund, where you approach an AMC with your investment and can start investing with as low as Rs. 1000. The table below offers a holistic view of the benefits and subtle differences between the two asset classes - ETFsIndex FundsStructureETFs are mutual funds that track a specific Index and are traded on stock exchangesIndex funds are just like mutual funds that track a specific indexNAVReal-TimeEnd of the DayBuying and sellingOn the Exchange for small unit sizes Through an AMC for larger ticket sizes (usually between 25-50 lakhs) Through Mutual Fund/AMC like any other mutual fundPortfolio DisclosureDailyMonthly/Daily in some casesTransparency of holdingsHigh (cannot deviate from Index)High (cannot deviate from Index)Holding modeIn Demat formPhysical/DematChoosing between ETFs and Index Funds: If you are looking for market liquidity or to gain from intraday trading, then ETFs would be the right option for you to consider. In the long run, both Index Funds and ETFs offer strong returns and are optimal for the diversification of your investment portfolio. In terms of costs incurred in owning either ETFs or Index Funds, you need to consider the Scheme Expense Ratio that indicates how much the fund is expected to charge in terms of an annual percentage cost to manage your investment and the Tracking Difference which enables you to determine how efficiently the Index Fund or ETF is mirroring its underlying benchmark index. Additionally, in the case of ETFs, you will need to consider the Impact Cost, which refers to the difference between the actual NAV and the price at which you buy the units on exchange. For example, if the ETF NAV is at Rs 100 and you purchase each unit at Rs 101, Re 1 is the additional or impact cost you pay to buy each unit. You will also have to factor in any brokerage or Demat charges that can be associated with the purchase of ETFs. Index funds do not have an impact cost as you directly buy from the AMC, and you get the units at actual NAV. If the difference in the expense ratio of an ETF and a similar Index Fund is not too high, then for most retail investors, Index Funds could be better as there are no additional impact costs or transaction charges to be incurred during investment or redemption. The other factor of comfort is that by investing via Index funds, you can easily follow the Systematic Investment Plan or SIP route, which could be slightly difficult to do in ETFs and you may need to depend on the broker to provide such additional facility or do it manually every month.Depending on your investible corpus, time horizon, and taking the above subtle differences into consideration, you can choose to invest in either of these passive funds for long-term gains. Our recommendation would always be to seek the advice of a professional expert to help you make the choice that is most suitable to your needs. (The writer is the Head - Product & Marketing, Edelweiss Asset Management Limited)

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Traders seek normal operation of shops

Traders from Maharashtra and Delhi have demanded the opening up of shops without any restrictions as small traders are no longer able to bear the financial losses incurred by keeping shops closed for two months. While the Maharashtra government has asked the local authorities to take the call, Delhi has allowed the opening up of only the construction activity and factories.Mumbai-headquartered Maharashtra Chamber of Commerce, Industry and Agriculture (MCCIA) has demanded that all types of shops across the state be allowed to open during normal working hours. “According to the rough estimate of the chamber, the traders from Maharashtra have incurred losses of close to Rs 75,000 crore since the lockdown was imposed in April,” said Lalit Gandhi, vice president, MCCIA.83134232In Delhi, the Confederation of All India Traders too has made the same demand as the NCR government has opted for selective opening of construction activities.The Confederation of All India Traders (CAIT) has sent a letter to Delhi chief minister Arvind Kejriwal asking to review the process of unlocking in Delhi.“Traders across Delhi are highly disappointed because they were expecting that shops will open from today in a phased manner to revive the business activities. Opening of construction activities and factories certainly require various raw materials. The business of Delhi has been completely derailed, how will that business be restored when there is an acute financial crunch,” said CAIT secretary general Praveen Khandelwal.

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PSU banks plan Rs 8,500-9,000 crore of QIPs

New Delhi: Public sector banks are expected to launch qualified institutional placement (QIP) offerings worth ₹8,500-9,000 crore in the next quarter amid a rebound in equity markets, according to sources in the know.The public sector banks that are lining up such offerings include Indian Bank, Bank of Maharashtra and Canara Bank, these sources said. All three are expected to launch their offerings between July and September.Indian Bank is planning to raise ₹4,000 crore through a QIP and is expected to time its offering around the first week of July. It is said to have appointed six merchant banks for the planned offering. ICICI Securities will be among the lead arrangers. It had passed a board resolution on March 9, enabling it to raise funds.Similarly, Bank of Maharashtra is also expected to launch its QIP offering in July. It plans to raise ₹2,000 crore. The bank had passed a board resolution on April 29, allowing it to raise up to ₹5,000 crore by way of share sales. It is in the process of finalizing merchant bankers to advise it on the sale. 83127333Canara Bank is also planning a QIP offering of around ₹2,500 crore. It sought board approvals over the weekend.Indian Bank, Bank of Maharashtra and Canara Bank did not respond to ET’s queries.Apart from the resurgence in equity markets, the exuberance around fund-raising by these public sector banks follows the recent successful QIP offering of Union Bank of India that raised ₹1,500 crore in May. “There is demand for paper in the market, especially at good valuations. The public sector banks are being seen as cheaper bets compared to private sector banks,” said Devang Mehta, head equity advisory, Centrum Wealth.Mehta also noted that commentary from large public sector banks such as the State Bank of India has been positive, giving confidence to investors.During the last fiscal, state-owned banks raised ₹11,000 crore in equity offerings. Indian Bank recently reported its earnings for FY21. It reported a net profit of ₹1,709 crore in the fourth quarter. Allahabad Bank got amalgamated into Indian Bank effective April 1, 2020, after a government-mandated reorganisation.Bank of Maharashtra reported a net profit of ₹165 crore for the last quarter of the preceding financial year. Canara Bank also posted a net profit of ₹1,010 crore in the fourth quarter of FY21.Several public sector banks including Punjab National Bank, IDBI Bank and Bank of Baroda had successfully raised funds through this route in the previous financial year. Bank of Baroda's QIP, which was the largest, garnered ₹4,500 crore from investors.

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Airtel Payments Bank set to break even this fiscal

Airtel Payments Bank (APB) is set to break even in this financial year, having notched up strong revenue growth in the previous fiscal and also turned contribution positive, implying revenue fully covered variable costs, said a senior company executive.Covid-19 is a major growth driver for Bharti Airtel’s payments banking arm, he said, as customers want banking solutions closer to their homes and also seek convenient and more secure digital payment options.“Airtel Payments Bank is confident of breaking even this year, helped by the growing scale of its model that leverages deep distribution backed by investments in digital infrastructure,” the executive told ET on condition of anonymity.In 2020-21, APB saw 60% year-on-year growth in savings accounts deposits and its base of active revenue earning customers (RECs) swelled more than 77% year-on-year to 55 million. 83131835The company recorded 32% year-on-year revenue growth to Rs 627 crore, and its services were a key reason for reducing mobile subscriber churn for parent Bharti Airtel, said company insiders. Airtel’s monthly customer churn dipped to 2.2% in the quarter to March from 2.6% a year ago.“APB has taken another giant leap towards profitability this year,” managing director Anubrata Biswas said, adding that the combination of its brand and innovative products backed by distribution reach and technology positions it well to accelerate growth further.He said Airtel’s innovations such as ‘Safe Pay’ are a major services differentiator amid Covid-19 and that APB has also become a large provider of cash collection services to institutions and companies and sees it as a big growth engine. Bharti Airtel CEO Gopal Vittal had recently warned the telecom operator’s 321 million mobile users about increasing cases of cyber fraud and urged them to use Airtel Safe Pay, which can be activated while using APB services. In December 2020, Bharti Enterprises chairman Sunil Mittal had said Bharti Airtel may upgrade its payments bank licence to that of a small finance bank at some point to enter the lending business and attract larger deposits.If that happens, it will be able to use deposits from its 55 million users more profitably, said industry executives. A payments bank can provide services such as savings accounts, remittances and other payment options, but current regulations do not allow it to lend money. For instance, ABP now offers digital payments and money transfers along with value-added products such as insurance, direct benefit transfer credits, Aadhaar-enabled payment systems and pension schemes.Company executives did not, however, comment on specific time frames to convert APB into a small finance bank.

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AICC panel meets Punjab MLAs amid rift

As the Congress central leadership on Monday initiated ‘dialogue’ with Punjab party MLAs to find an amicable solution to the rift in the state Congress ahead of the assembly elections, some of them are learnt to have voiced protest over chief minister Captain Amarinder Singh’s ‘soft handling’ of the 2015 ‘sacrilege case’. The high court had recently quashed a state government probe into the death of two people in police firing on those protesting against the desecration of the Granth Sahib in 2015, when the Shiroman Akali Dal-BJP government was in power. With the case acquiring religious sensitivity and many Congress MLAs agitated, the AICC is worried, with less than a year left for the assembly polls.Over 30 MLAs, including PCC chief Sunil Jakhar and some Cabinet ministers, held two separate rounds of meetings with the AICC panel comprising general secretary in-charge Harish Rawat and Mallikarjun Kharge and JP Aggarwal. The MLAs were asked to give their view on the issue. More MLAs, the CM and sulking MLA Navjyot Sidhu are expected to meet the panel soon.While Amarinder Singh had taken a clear upper hand in dealing with Sidhu, the sacrilege case has provided many other critics of the CM to join hands against him on a sensitive religious matter as well the allegation that rival Akali Dal leaders were allowed to get away from the sensitive corner. Many MLAs are learnt to have asked for a ‘course correction’. They argued that otherwise, Congress would be seen going back on its promises to the electorate. There are indications that Rahul Gandhi has been individually talking with some MLAs.On the eve of the meeting, Captain’s critic PS Bajwa tweeted, “be courageous and answer the call of your conscience. The almighty and people of Punjab are watching.” It is seen as his advice to other critics of the CM. With the sacrilege case driving a wedge in the party, the Sidhu camp has tapped it, even while seeking pre-poll posts including renewal of his wish for deputy CMs post and other grouse regarding non-constitution of the PCC. “There is no question of any discussion on a change of leadership in the Punjab government and our efforts is to unite the state party completely ahead of the assembly polls by addressing all internal issues,” said an AICC source. As of now, the CM is believed to enjoy majority support of MLAs.

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ABB India breaches key level, could deliver 20% return

Mumbai: Shares of ABB India on Monday decisively broke past a 13-year consolidation phase to trade above ₹1,600 apiece. If it sustains above that level, it can easily give a 20% return in the near term, according to technical analysts.ABB India is better placed to gain from the expected pickup in capex in the coming months, said analysts.“ABB has given breakout after consolidating for 13 years from 2008 to 2021 and with strong capex recovery, one can expect the stock to continue its upward journey,” said Ashish Chaturmohta, director-research, Sanctum Wealth. “In the short term, we expect ₹1,900-2,000 levels in the stock”. Shares of ABB India rallied 21% in the last month, compared to a 6.5% gain in the Nifty index. It ended 4.85% higher at ₹1,668 on Monday.Analysts said that the stock is also making higher tops-higher bottom from the last six trading sessions with rising trading and delivery volumes.“Technically, it has completed a rounding formation which has bullish implications on a weekly scale and is set to start the next leg of the rally,” said Chandan Taparia, technical analyst, Motilal Oswal Financial Services. “It has immediate support near to 1,600 zones, while a rally could extend toward 1,750 and 1,900 zones in the coming weeks.” 83127325ABB India has reported a decent set of numbers in the March quarter across all its segments led by a pickup in economic activity, better order book execution and cost rationalisation initiatives resulting in margin improvement. Despite the second wave of the pandemic, order inflows came in healthy at ₹1,830 crore driven by process automation and robotics businesses. “In the long run, we believe ABB’s resilient business model, healthy global distribution network, diversified business segment and a strong cash position would benefit the company from recovery in economic activity,” said Viral Shah, analyst, Prabhudas Lilladher.Although the management remains cautious in the near term owing to the second wave of Covid-19 in the domestic market and challenges in the global market, it hinted at the early signs of recovery in industries like data centres, renewables, electronics, F&B, and pharmaceuticals. ABB India will continue to focus on order wins and seamless execution across projects while continuing to engage closely with customers, according to the management.ABB’s total order backlog stands at ₹4,300 crore which according to analysts provides revenue visibility for the next few quarters.“The parent’s decentralisation strategy should be beneficial for ABB, as it would lead to increased transfer of products and technologies,” said Jonas Bhutta, analyst, PhillipCapital. “We like ABB’s future-ready business model backed by structural tailwinds of increasing penetration of digitisation and automation but getting to sustainable margins levels would need the parent to either review its policies.”

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FTX Crypto Cup: Magnus Carlsen clinches world's first bitcoin chess event

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AMD Ryzen 5000 Desktop APUs, Radeon RX 6000M Mobile GPUs, FidelityFX Upscaling Tech Announced at Computex 2021

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Naomi Osaka pulls out of French Open

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Loki, The Family Man, Jagame Thandhiram, and More: June 2021 Guide to Netflix, Disney+ Hotstar, and Prime Video

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Intel CEO Pat Gelsinger Reiterates at Computex Global Chip Supply Shortages Could Last Several Years

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Fitbit to Introduce Snoring Detection to its Smartwatch, Fitness Band Models

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Intel 5G Solution 5000, New Faster 'Tiger Lake' Laptop CPUs Announced at Computex 2021

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American ethnic groups pledge $1 million to India

A coalition of various Asian-American groups, including Indian and Chinese, on Sunday announced to have pledged USD 1 million towards COVID-19 assistance in India. The New England Asian American Coalition (NEAAC), in a statement, said it pledged to raise USD 1 million to support two non-governmental organisations --Sewa International USA and Ekal Vidyalaya Foundation -- in tackling the pandemic. "Asian-Americans are coming together and standing with fellow Asian-Americans to help with this humanitarian crisis," said George He from the New England Chinese American Alliance. While the current focus of the coalition is to provide relief from the health crisis, its long-term objective is to lay the foundation for a collective group of Asian-Americans who can provide support for any need that gets the attention of New Englanders, a media release said. "When there is suffering anywhere, in the US or elsewhere, Asian-Americans are always at the forefront of providing support. Together, we can amplify our impact," Satish Jha, who initiated the coalition, said. Raju Datla, a volunteer at Sewa, said, "The challenge in the urban areas has brought support from many NGOs. Sewa International shipped more than 7,250 oxygen concentrators, 250 ventilators and disbursed USD 6 million in grants to various partner organisations working on the ground in India." Ranjani Saigal, executive director, Ekal Vidyalaya foundation of USA said the challenge in rural India is even greater without viable access to healthcare. "With a focus on Rural India, Ekal Vidyalaya has sent over 10,000 medical devices and medical kits to the villages," she said.

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Ajay Devgn buys Rs 60 cr bungalow in Mumbai

MUMBAI: The economic slowdown and pandemic have not dampened the appetite of Bollywood biggies for luxury homes.After Alia Bhatt, Janhvi Kapoor, Hrithik Roshan and Amitabh Bachchan, actor Ajay Devgn has also invested in a plush property. Devgn is believed to have bought a sprawling bungalow here in Juhu for around 60 crore.The bungalow spread across 590 sq yards is not far from the actor's existing bungalow, Shakti, situated in the Kapole Co-operative Housing Society Ltd in Juhu.Devgn's spokesperson confirmed to that the star has purchased the property located in the very lane where he currently resides. However, the price of the bungalow was not revealed by him, but real estate sources. The locality is home to other celebrities, including Hrithik Roshan, Amitabh Bachchan, Dharmendra and Akshay Kumar. Sources said that the Devgns were looking for a new home for the past one year.The deal was struck last November-December and the Kapole Co-operative Housing Society transferred the bungalow in the joint name of Veena Virendra Devgn and Vishal alias Ajay Devgn on May 7.The bungalow was earlier owned by the late Pushpa Valia. Real estate sources said that the existing price rate of the bungalow is around 65 to 70 crore, but due to the pandemic Devgn may have bought it at a discounted rate.Sources said that Devgan took possession of the bungalow and has even started renovation work as he wants to redevelop his existing bungalow.

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PSBs to implement a uniform process for loan recast

Mumbai: Unlike last year, public sector banks will follow a standard operating procedure this time while identifying and sanctioning loans to be restructured for micro, small and medium enterprises and individuals.The template for restructuring has been finalised on the insistence of the Union government, which wanted faster approvals and a quicker process for all state-owned lenders, people familiar with the matter said.“Last year, the government received a lot of complaints from customers on delays and deficiencies involving public sector banks. Different PSBs had different procedures and service levels. To ensure all banks are equally proactive, it was decided that a single template will be used to invoke restructuring for these loans,” said a person familiar with the decision.The mechanism was developed after consultations by a six-member committee headed by State Bank of India managing director CS Setty that included executive directors of other PSBs.The restructuring template announced by PSBs on Sunday divides loans into three categories — up to Rs 10 lakh, above Rs 10 lakh to Rs 10 crore and above Rs 10 crore.“Loans up to Rs 10 lakh, which cover mostly individuals, will follow a standard pattern across all PSBs. The process is similar for loans above Rs 10 lakh too but banks have been allowed some tweaks according to their own policy for loans of larger size,” said Rajkiran Rai, chairman of Indian Banks’ Association, which has brought PSBs under one umbrella for implementing this.“This templated approach will help banks to streamline their offerings and help the small banks to benefit from the processes and service standards of the larger PSBs. We are working on the number of accounts which will be offered this facility, which will be clear in a couple of days,” said SBI chairman Dinesh Kumar Khara.The Reserve Bank of India opened a second window for restructuring loans of MSMEs and individuals on May 5 under which banks could extend repayment tenors to up to two years for loans aggregating Rs 25 crore or less.The new window is open to individuals and MSMEs that did not avail of the restructuring last year and for loans that were not classified as non-performing assets as of March 31, 2021.

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Japan considers asking Olympic fans for negative COVID tests, vaccinations

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Zverev comes back from two-sets to win against qualifier Otte

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Argentina no longer hosting Copa America: CONMEBOL

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ET Wealth | 6 money habits we have to change now

Covid has forced us to look at some aspects of life afresh. For many people, the financial fallout of covid has brutally exposed the fragility of their personal finances. Salary cuts and job losses have left many scrounging for cash. Despite being asset-rich, some have struggled to arrange for liquidity to tide over a cash crunch. The disruption in income has blown away rosy calculations and ambitious goals. Borrowers have been unable to cobble together enough money to pay back hefty loans. Hundreds who have succumbed to the virus have not left behind a will, leaving families without access to assets. The message is clear: we must change our money habits and question preset notions of financial security. Many of us are set in our ways of dealing with money matters. Just as we revisit other facets of life post covid, it is time to refashion some of our saving, borrowing and investing habits. Not sure where to start? After speaking to financial advisers, we have zeroed in on a few areas that demand your immediate attention. Not all of these tweaks can be done overnight. Some habits may have to be phased out gradually. A new approach may take time to take shape. But over time, these tweaks should put you in a better position to deal with financial shocks.Always have ample liquidityThe pandemic has brought into focus the importance of having enough liquidity at all times. Simply having huge savings doesn’t count for anything if these are illiquid. Your prized real estate assets won’t come to your aid when in need of immediate cash. The lakhs stashed away in instruments with a lock-in will also be out of reach. Forget about getting your money out of traditional insurance plans either. It’s not at all wrong to have illiquid assets. But it is vital to have sizeable chunk of savings in assets that you can sell quickly on a rainy day. Vivek Rege, Founder & CEO, VR Wealth Advisors, says, “Investing all savings without providing for liquidity comfort will pose a serious problem when you desperately need the money.”You can ensure liquidity by setting up an emergency fund that is big enough to take care of 3-6 months’ expenses. Some experts say a nominal buffer of 3-6 months’ expenses may no longer be adequate. Prableen Bajpai, Founder and Managing Partner, FinFix Research & Analytics, asserts, “Emergency savings need a drastic overhaul in the face of prolonged threat to jobs and incomes. At least one year’s expenses should be kept aside for this.” Where should you invest your emergency corpus?Assumed expenses Rs 50,000 a monthOne year expenses will work out to Rs 6 lakh. Divide this into three time horizon buckets as follows 83056626Note: When providing for monthly expenses, cover all basic living expenses as well as any EMIs. SIP outflows may be excluded.The requirement may be even higher for those engaged in more vulnerable occupations with limited alternative work or for households where both partners work in the same industry. It is also important to review your liquidity position periodically. This buffer may be in the form of bank deposits or even open-ended mutual funds, apart from idle bank balance. Having enough liquidity comes at the expense of lower returns, but it’s a price worth paying. Don’t borrow future incomeThe ‘buy now, pay later’ philosophy has got a rude jolt. Amid salary cuts and business disruptions, many individuals and households who borrowed heavily are stuck in a quagmire. Some are unable to repay the loans while others are left with little savings after servicing hefty EMIs. For many, the issue is of borrowing more than they can afford. When taking on a big loan, most borrowers make rosy assumptions about future income. Even if the loan or outlay seems out of comfort zone now, many surmise that a rising income trajectory will make it more affordable down the line. This logic often dictates the spending itself: Why not shell out a few lakhs extra for the roomier 3BHK even when a compact 2BHK would suffice? In lieu of the hatchback, what is a few thousand more rupees in monthly EMI for that swanky new sedan? It is this premise of borrowing from future anticipated income that can spell disaster. This thinking has to be revisited as shocks can disrupt the best laid plans. Rege cautions, “Don’t fool yourself with false optimism regarding the future. It often drives lifestyle changes that can be painful to reverse later.”Any loan decision must be taken on the basis of prevailing circumstances. The thumb rule is that all EMIs should not add up to more than 50% of your current income. Also, don’t take a loan just because it is available. If your EMIs gobble up too much of your income, other critical financial goals, like saving for retirement or your kids’ education, might get scuppered.Stress test your debt burdenBefore taking a hefty loan, consider the undesirable scenarios that may play out in future.Inflation rate assumed at 5%, normal income growth at 5% 83056672 83056681A buffer beyond health plansAmid the spate of hospitalizations, thousands of sufferers have found out the hard way the inadequacy of their mediclaim plan coverage. Insurers are refusing to pay higher than prescribed rates charged by private hospitals or cover the cost of overhead consumables like PPE kits and sanitization equipment—accounting for a chunk of covid hospital bills. With several instances of claims being denied or settled only for partial amount, policyholders have had to pay for expenses themselves. An analysis of official data shows that insured are shelling nearly 40% of the treatment costs from their own pocket. Many have even been denied cashless settlement—policyholders are being told to pay the full amount and file the reimbursement later. 83056744Clearly, your mediclaim cover may not fully cushion the blow from medical exigencies. This is a reality not merely restricted to the abnormal circumstances of the ongoing pandemic. With multiple exclusions and clauses like co-pay or sub-limits within health plans, policyholders are always at the mercy of the policy fine print. Think a Rs 25 lakh or higher policy will cover all expenses? Even those with large-sized covers are never fully covered for all expenses. Policyholders must henceforth put in place extra financial buffer even if covered by a health plan, financial planners say. “It is a good idea to have extra cushion in place for medical exigencies that goes beyond what is covered under your health plan,” contends Bajpai.Write will, update nomineesThe pandemic has claimed victims across age and class divides. Many of these were breadwinners who left behind assets, but no written wills or nominations. Bereaved families have to fend for themselves without immediate access to their own household assets. There is a clear lesson in this. Preparing a will cannot be a task kept aside for later years. If you have dependents, execute a will or at the very least, make sure to have nominations in favour of your loved ones at the earliest. Save them the drudgery of running from pillar to post claiming their rightful assets in case of your untimely demise. Not having sufficient assets yet should not stop you either. “You can still create a will covering whatever assets you own today and update it over the years as and when you accumulate more,” exhorts Tarun Birani, Founder and Director, TBNG Capital Advisors. This follow-up is critical. Make sure to update the will at regular intervals. This may be through a codicil for minor alterations or executing a fresh Will for bigger modifications. Besides, at all times, keep a trusted, responsible family member informed about the existence and location of all important financial documents.Cover big-ticket liabilitiesWith the death of the breadwinner, many families now face the burden of repaying outstanding loans. This has exposed another gap in people’s borrowing habits. When opting for large ticket size loans, it is not enough to have a roadmap to repay. Buy a term insurance cover equal to the loan amount to protect your family from shouldering the burden of repayment in case of your untimely demise. If you are taking a large home loan, opt for a term plan linked to the home loan or a separate cover. This has to be over and above any existing term plan that covers your family’s future income needs, insists Bajpai. It will ensure proceeds from the existing policy don’t go towards paying off the loan, leaving your family exposed. The worst scenario is when the family occupies the house mortgaged in the name of the deceased, but not covered under a term plan. “Covering your liabilities through a term plan will ensure the asset can come into the possession of surviving beneficiary easily after outstanding balance is paid,” asserts Rege. In case of a term cover bundled with the loan, the coverage reduces in direct proportion to the outstanding loan. The one-time premium amount is embedded in the EMI. However, it is advisable to buy a separate term plan. The premium for a linked term plan is usually higher, even if not visible upfront. Further, you cannot hike the cover amount under a linked term plan in case you opt for a top-up loan. You will have that flexibility with a separate term plan.Go beyond domestic marketIndian investors have traditionally piggybacked entirely on the India growth story for wealth creation. While this has served investors well enough, the pandemic and its economic fallout should force a rethink of domestic bias. Experts reckon it is high time Indian investors look beyond the country’s borders for investing ideas. International equities can no longer be treated as an exotic indulgence but an integral part of one’s asset allocation, feel financial planners. 83056768 The inherent strength of developed markets has been amply evident in the post-covid global environment. Economies like the US, UK, Germany, among others have shown fast recovery amid swift healthcare response and hefty economic relief packages. Viraj Nanda, CEO, Globalise India, argues, “More than any other point of time, covid has demonstrated how countries respond differently to adversities. This feeds into the respective markets. Geographical diversification is therefore a must to mitigate country-specific shocks.” Beyond this, other countries have specific strengths and expertise that are unique to each. This allows for investing opportunities that simply do not exist in Indian companies. 83056783 However, this allocation to foreign equities cannot be merely cosmetic. Investors must participate more meaningfully in foreign equities. For it to truly afford required diversification and contribute to wealth creation you need to give it enough heft in your portfolio. Any allocation less than 10% of your total corpus will not materially make any difference, even when it is the best performer in your basket.Experts maintain that 15-20% allocation will provide enough diversification. But this can’t happen overnight. “Start with small steps, build enough comfort and familiarity with foreign markets and gradually work towards that allocation,” says Nanda. This may be through equity funds investing across global equities or dedicated to US markets or even individual bets in foreign stocks.

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Stay away from these 3 financial stocks

The second covid wave has hit the economy very badly. After suffering a deep cut between March-June 2020, the Indian economy had bounced back smartly. However, experts fear the recovery will be slower this time because the spread of the disease has been wider. While it was restricted to urban areas last year, covid has reached villages this time. “Economic recovery could be more gradual for two reasons. First, the impact of restrictions are deeper and there is anecdotal evidence to suggest impact on agriculture activities. Secondly, there is a possibility that a section of the population might have dipped into their accumulated savings during the past year and therefore, possible recovery triggered by pent up demand would be lower,” says Prakash Agarwal, Director & Head -Financial Institutions, India Ratings & Research.Financials under stress The finance sector’s prospects are interlinked with economic growth and therefore, it will come under pressure this time as well. In fact, the negative impact on financial services sector may be more this time. “Though we need to wait for first quarter numbers, financial institutions will see incremental stress on their book because there is no blanket moratorium this time,” says Siddharth Purohit, Research Analyst, SMC Global.In addition to increase in defaults from the corporate side, financial institutions are also facing incremental stress on their retail books. As a sizable population has already exhausted its reserve money, chances of more defaults are high. The recent fall in collection efficiency—percentage of EMIs an institution is able to collect—is an indicator. However, large banks may be able to manage this jump in retail default as their exposure to this segment is not very big. “Retail loans are spread out and will be impacting all if lockdowns extend. However, large private sector banks are carrying adequate provision buffers for future delinquencies in these segments,” says Kajal Gandhi, Banking Analyst at ICICI Direct.83057956While big banks will be able to withstand using their muscle power, smaller banks and NBFCs will be under increased threat. “While collection efficiency will be impacted for all lenders, things are likely to be more difficult for NBFCs because they are dealing with weaker sections of society that has less capacity to withstand stress. While the proportion will be lower for secured loans like housing finance, the impact will be more in unsecured loans and vehicle finance. Their collection efficiency might be down by 15-20% by midMay,” says Agarwa.83057969What should investors do? Avoiding the entire financial sector now can be one strategy. Most finance companies have reported good numbers for the fourth quarter of 2020-21. However, things deteriorated after that and therefore, fourth quarter results are not of much use now. Banks and NBFCs were in the forefront of recent stock market rallies and therefore, they may take a breather till clarity emerges through the first quarter numbers. “Banking sector is expected to underperform the broader market in coming months,” says Purohit.Even if you want to remain invested in large banks, it makes sense to exit smaller banks and NBFCs. Analysts are particularly negative on three companies—IDFC First Bank, Yes Bank and Bajaj Finance. “Basel disclosures indicate slippages rate of 6% for 2020-21 for IDFC First Bank, which is on higher side compared to peers. Due to current wave, we expect slippages of 3.5% and credit cost of 1.7% in 2021-22, but should subside from thereon,” says a recent Prabhudas Lilladher report.With a gross and net NPA of 15.4% and 5.9% respectively, Yes Bank continues to face serious asset quality issues. “With the raging second wave, asset quality risk is likely to remain elevated and RBI’s refusal to allow the bank to set up a separate ARC has dashed its hope of window dressing of balance sheet,” says a recent Emkay report. Though the long term story of Bajaj Finance—one of the best balance sheets among NBFCs— is still intact, the second wave will negatively impact it in the short term. Its current high valuation is another reason why analysts want you to avoid this counter now. “We retain a sell on Bajaj Finance because its current valuation is rich,” says a recent Nirmal Bang report.

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Time to reduce excess exposure to silver

Just as different asset classes perform over different time periods, performance by components within the same asset class also varies. For example, silver has generated 61% returns in the past year compared to just 9% by gold. Due to this massive outperformance, the gold - silver ratio has crashed from a high of 124 on 18 March 2020 to 68. The ratio denotes the price of gold as a multiple of the price of silver. It is now close to a six-year low.So, what should bullion investors do now? This depends whether you are a long-, medium- or short-term investor. Since the phase of silver undervaluation is over, there is no need for long-term investors to take additional exposure to silver now. Long-term investors who had taken such a bet on silver in the past can also cut their exposure to neutral levels.Though the long-term trigger for silver’s undervaluation compared to gold is gone, there are several opportunities still left for short- to medium-term bullion investors. The bullion market is going through a phase of consolidation. Gold is expected to outperform silver in the short term (1-3 months) and silver is expected to outperform gold in the medium term (6-9 months). Let us consider the reasons behind this special situation.83058410Gold is expected to benefit in the near term due to various reasons and therefore, short-term investors should bet on gold more. First, the industrial metal rally has tapered off due to efforts by China to stabilise prices of global industrial metals. Since half of silver’s use is by industries, this will impact silver negatively along with other metals like zinc, copper, etc. However, gold will be spared this turmoil and outperform. Gold’s safe haven demand has also been going up of late. “The recent Chinese crackdown on crypto currencies has shaken investors and global disenchantment with crypto currencies is pushing investors into alternatives like gold,” says Praveen Singh, AVP, Fundamental Research – Commodities & Currencies, Sharekhan. The second covid wave has also helped gold. “Due to the covid wave, the US Fed is expected to take more time to increase rates and this will help gold to outperform silver over the next 1-3 months. However, I don’t think this ratio will go beyond 85 during this phase,” says Sugandha Sachdeva, VP – Commodities & Currency Research, Religare Broking.Once the short-term correction phase is over, silver is expected to continue with its outperformance and therefore, short term investors can shift back from gold to silver. The basic behavioural difference between gold and silver price movements is also a major reason for this. For example, silver and gold perform differently despite being precious metals and a close look at the long-term historical price charts will reveal this. “There will be some price action in gold every year. However, silver will remain in slumber for years and then jump up suddenly by 50-70% over 1-2 years before going back to sleep again for the next 4-6 years. Since this medium term silver jump will continue for the next 6-7 months (till end of 2021), silver is likely to outperform gold in 2021 also,” says Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services.While the 50% industrial use is a negative for the short-term, it becomes positive for silver in the medium-term. Though growth is still fragile, the global economy is now on a recovery path and this should favour silver and help it outperform on a yearly basis. “Silver fell along with other metals like copper, etc due to recent Chinese actions; but this is not going to last long. Global economic recovery will help silver in the medium term,” says Singh. “The Green initiative by US under Joe Biden and increased usage of silver in products like solar panels, etc are other long term positives for silver,” says Sachdeva.So, what can be the gold-silver ratio target for the medium term? Speculative markets rarely trade in fair zones and they usually move between two extremes. “Due to momentum favouring silver and its better potential in the medium-term, the gold -silver ratio will go down more in the medium term before coming back to its long-term average later,” says Singh. How much more can this ratio go down before reversing? “I expect the medium-term reversal of gold-silver ratio to happen around 60-62 levels,” says Damani.

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Should you invest in new international MFs?

Since the beginning of February, in just four months, Indian mutual fund companies have launched as many as eight new international funds. In fact, four of these have been launched (or are in the process of being launched) during the current month alone. If you add two funds that were launched in the last week of 2020, this comes to 10 international funds launched in five months. This is by far the highest pace at which new international funds have been created since this category became legally possible and the first such scheme was launched in March 2004. Why is there this sudden enthusiasm for launching new international funds? Based on the past behaviour of mutual fund companies, the biggest reason is that they can. Historically, like all businesses, mutual fund companies have preferred to launch new funds because for a variety of reasons, it has been easier and more profitable to sell new funds. However, two years ago, funds regulator Sebi codified the categories under which mutual fund schemes could be launched. In all the mainstream categories like large cap or mid-cap, they were limited to one fund each. However, in categories where many variations are possible, they can launch as many as they like if each has a different theme or focus. Coupled with the way global equity markets have stayed robust during the pandemic—at least so far— this has created an incentive to launch international funds. An entire planetful of possible variations await. You only have to read the names of the funds to see that this is happening: Axis Global Innovation, Axis Greater China Equity, BNP Paribas Aqua, HSBC Global Equity Climate Change, Invesco Global Consumer Trends, Kotak International REIT, Kotak Nasdaq 100, Mirae NYSE FANG+, SBI International Access - US Equity. Some of these are quite close to being general diversified funds, some are slightly focussed versions, while some have fairly narrow and exotic themes.In general, whether one is talking about domestic equity funds or international, it should not be the investor’s job to figure out which theme or sector or region will do well. When you invest in a mutual fund, you are paying a fund manager to make investing decisions for you. It’s his or her job to figure what type of investment is best at the moment. Figuring out whether it’s pharma or banking or climate change or aqua(!) the right area to invest in, that’s part of the service that you are supposed to get when you invest in a mutual fund. However, when you get tempted by a fund that’s supposed to limit itself to a particular subset of possible investments, then you are pre-empting the fund manager and making an investment choice yourself. If you understand enough to do this yourself, then that’s fine. However, if you end up doing it in response to someone’s marketing pitch, then that’s not so good. As far international investing goes, as I’ve written several times, every Indian equity and equity fund investor should have some proportion of their equity portfolios in foreign equity. The investing logic is unbeatable, the tax advantage is no longer significant and the exchange rate provides an additional cushion. However, just like domestic funds, the basic principles of investing cannot be passed by. In fact, because few Indian investors keep day-to-day tabs on the global business and investing environment the way they do for India, fund choice becomes even more critical. When in doubt, and when lacking in information, begin by choosing the less adventurous option. Find simple, diversified equity funds that give themselves a wide canvas to paint on, and most importantly, use SIPs to invest just as you would for a domestic fund.(The writer is CEO, Value Research)

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