Business News

Covid created this huge bull mkt: Shankar Sharma

Business News - January 22, 2021 - 2:03pm
One has to go beyond four banks and five FMCG companies. If you have to buy that, then just buy the Nifty. Why do you have to pay a fund manager for that, says Shankar Sharma, Vice Chairman & Joint MD, First Global.Did you see Sensex reaching 50,000 or was the naysayer in you saying that it is going to be a while before we get there?No, I clearly did not see 50K coming up. At some point, it would have come up but it was not there in the thoughts. It has happened largely because of Covid. What caused the problem, has also caused the solution. It seems very paradoxical but this bull market, not just in India but across the screen in Asia including China has been blowing out the lights, Taiwan, Korea, even Japan which has never done well in the last 30 years, has been a rocket market for the last one year. So, Covid created a massive problem but that led to the massive stimulus by the US Fed and the other governments. It is a 2008-2009 situation all over again. Following the GFC and massive crash, there was a big stimulus and we saw a 10-year bull market emerging from 2009. Covid did the same thing 11 years on. It is really bizarre that a huge problem like Covid has created this huge bull market. You have been an old hand in the market. When you entered the Bombay Stock Exchange, the trading used to happen in a ring and the badla system was still on?Oh! very very much I am very old school. It was an open outcry and it was great fun. About 3,000-4,000 people tightly packed like sardines tearing out each other’s hair and shirts and everything else. But it was real good fun. I really miss those days! When you took your first steps into this market, did you ever imagine that the index could give such a phenomenal return? I remember the day I entered the stock market. It was 1988 and I was an Assistant Manager in Citibank and I said that look I am very clear about one thing and that in the next 10 years, India is going to become a massive stock market and a significant market in the context of the global stock market. That was the reason I entered the stock market and in hindsight, it was great timing because when the 90s began and the markets opened up to foreigners and electronic trading, floor to floor trading went out, computers came in, research became sophisticated, foreigners imposed good governance practices on Indian companies and companies became more transparent. In hindsight was a great time to enter the markets as the markets changed on a secular dramatic basis and all the fruits we are enjoying today are the results of the ground that was laid in the beginning of the 90s. SEBI was born, better regulatory frameworks came in and many things changed. Is there danger in the market ahead?I do not think there is danger in the market for a while. Obviously one needs to be careful in the market. Why we are enjoying this current phase of the bull market is because nine months back when Covid created a massive problem, the central banks stepped in to create a massive solution and we are enjoying the fruits of that. The fruits are not going to go away. They are just going to stay there and increase. Around the 38,000-40,000 Sensex levels I was a little circumspect and wondered whether we have just stopped where we have stopped for the last three years. The market was failing to cross the hurdle. I was a little circumspect around that level and once the market took that out, then it became a pretty straightforward trade. The Covid remained a big problem till October till the vaccine changed a lot of things. So with the vaccine being there, the stimulus being there, the markets having conclusively broken away from their long-term trading range of 38000-40000 and there is a long journey ahead before we start to get seriously worried.If one has to understand the advantage of indexing or advantage of investing in ETFs, what should be the projected return for a passive investor?It is very straight forward. Ultimately the markets will mirror what your nominal GDP growth is. The 16% comes up till 2011 or 2012. If you look at returns of the market up to that point, it was very high and the reason was that we had very high nominal GDP growth which in part was because of relatively higher inflation but also pretty good real GDP growth. We were growing at nominal 16-17%; occasionally we grew at 18% also till 2014. Corporate profits were compounding at about the same pace, a little higher and markets were also compounding those rates. After that, inflation started to cool down and as a result, headline nominal GDP growth rate also cooled down and stock market returns cooled down as well. In the last five-six years, we have seen barely fixed deposit rates of returns on the equity stock markets and therefore none of us got compensated for taking equity risk. Now what happens in the future? If you believe that India’s long term nominal GDP trend is around 10% because getting to 16% is still a challenge irrespective of what the market index is showing and it is further down the road. So let us settle for a 10% which is respectable. From 2012-2013 till now, returns are maybe 6%. One should expect the future returns to be higher -- maybe 15%. So for the overall 10-year period or maybe 12-year period, it comes to 10%. The last 5-6-year average is very low and so the next 3-5 years’average should be relatively higher -- 12% or even 15% to arrive at the longer average of 10%. Which are the three index stocks you think will be knocked out and three new entrants that you see in the index?The Adani Group companies have been huge winners last year. Many people have been surprised with that but at least we have some newer companies coming into the fray. As for what goes out, index calculations are simple. Underperforming companies are forced out by the index committees and outperforming companies are brought in. We will see what underperforms this year, in the coming year. I definitely do not see IT going out. I do not see autos going out. We will see. It is a little early to make that call. Where do you find opportunities in the market given that valuations are heated up in certain pockets ?There are lots and lots of opportunities. Anybody who tells me that in India you have to own only 12 stocks in a portfolio is a lazy analyst. There are opportunities which have to be carefully evaluated. There is a risk in small companies. We all know that. But even with those risks, it is still a wide basket with a huge selection of companies. India is one of the widest stock markets at least in the developing world where there is a choice of roughly 600-700-800 companies. and with the IPO market being strong, we are going to see more and more companies entering the listed space. We are really spoiled for choice and we moved away from the Warren Buffett style of one company at a time. We adopt he data science approach. We do not buy human beings any more. We do not buy managements any more. We just buy numbers. We just buy data. It is far easier to deal with data than to deal with human beings. We have dealt with human beings and been wrong more times than we have been right. At least with data you are unlikely to be that wrong. So our approach is very data driven and when you do it on a data basis, you find far more opportunities than as a human analyst you uncover. There are opportunities in Indian tech for examples. Last year, it was a small segment of the market but you had very good winners in the form of internet plays like IndiaMART or Info Edge. Newer tech companies have joined the fray. India has a small but emerging technology space which is very interesting. Even the old metal companies like Hindalco, Tata Steel, JSW have done phenomenally well for us. One has to go beyond four banks and five FMCG companies. If you have to buy that, then just buy the Nifty. Why do you have to pay a fund manager or pay us 1% or 2% fees to go and basically try and replicate the Nifty. I put 40% in banks and I will put 15% in Reliance and I will put 10% or 15% in FMCG and say I am a portfolio manager or a mutual fund manager. That cheating people. You have to go out of your comfort zone, do some hard work, pick 20-30 great companies which are outside of your mainline 10-15 companies and think it is very doable. We are doing it.
Categories: Business News

Labour surplus India lacks skills

Business News - January 22, 2021 - 2:03pm
For a labour surplus economy, India faces acute shortage of skilled workers. The recent Human Development Report 2020 highlighted that one out of five workers in India is skilled. According to the report, skilled labour as a percentage of the labour force in India stands at 21.2%, and other countries which share a similar position include the likes of Sudan, Cameroon, Ivory Coast and Liberia. Amidst the pandemic’s adverse blow to the country’s labour market causing reverse migration and loss of 122 million jobs, as per Centre for Monitoring Indian Economy (CMIE), the entire skilled labour segment seems to have disappeared and bypassed the workforce. According to Suchita Dutta, Executive Director, Indian Staffing Federation, even before the pandemic, the necessity of upskilling was not a part of livelihood or given a high priority. “The low-income workers wouldn’t go out of the way, take time off to learn or go upskill themselves while they are still employed somewhere. It was not something that was very popular. People see it as a loss of time and money as they don’t get paid for the time they take off. People who are doing both working and learning skills will also have too much to manage in their personal time and lives,” she told ET Digital.She added that even if the workers invest themselves in training, there is no guarantee that they will end up with a job. Initially, the aim was to get people skilled and trained but not exactly mapping them to employment. She explained that only after the initial assessment showed that getting trained was not the necessity of the system, but getting paid was. Adding to this thought, Chocko Valliappa, Vice Chairman, Sona Group of Institutions, told ET Digital that the government has been putting money on building skilling centres at one place (small towns and villages) but the jobs are demanded in another place (Tier-1, 2 cities). “Every year it is doing the same, and it is only accelerating the migration crisis. We need to put money on jobs more than skilling, give the industry money for every job you create. You train 500 people for 3-6 months and after that they have to wait in line for a job which may or may not come. It could be a nine-month wait or no work sometimes. You have allocated funds and partnered with skilling partners and your job is done, but the guarantee for jobs for these skilled labour is not there. Skill segment shouldn’t depend on the government, but on industry. For example, the government should pay the auto industry for every skilled labour it hires,” he said. 80379391Speaking on similar lines, Amit Vatsyayan, Partner, Government and Public Sector, EY India told ET Digital that industry participation at all the stages of the process needs to be enhanced. “Besides being an employer, industry should take part more in course design, capacity building, setting up Centre of Excellences and providing exposure to youth through industrial visits, expert talks, etc. Also, the job seekers and existing workforce need to continuously upgrade their skills given the changing job market with faster adoption of technology,” Vatsyayan says.New definitionsHowever, the narrative around skilling has changed with the rise of gig economy. The ecosystem of flexible, freelance and task-based jobs has put the skilled labour in the informal sector at the centre. Gayathri Vasudevan, Chairperson of social enterprise LabourNet, believes that the gig workers’ ecosystem has shed light on the idea of how skills equals, income equals, productivity. “I think the gig economy will be the focus in the next coming decades as here the market itself is pushing us to recognize the workers in the unorganized sector,” she told ET Digital. She added that even before the gig workers’ ecosystem came about, there was a requirement of consistent skilling and the majority of the workforce changed sectors every decade. Today, it is all about multi-skills where someone who is washing a car in the morning might do the job of disinfection in the day and sales in the evening. Further, she believes that the times of PSUs are gone and nobody wants to have any more full-time employees. “So we need to understand where the market is moving towards and today in the market led by gig workers and wage has been put to a task. Therefore, the budget needs to think of its fiscal measures, sponsorship alone will not give results and we need a tremendous amount of fiscal stimulus to happen. For example, the skilling companies and gig workers’ platforms need to move to a lower GST slab. This way we will nurture the platforms, which in turn will boost creation of jobs in the skill segment,” she said. Apart from this, she believes that the budget needs to ensure there is a whole facilitating ecosystem of skill training which is not just based in cities or focused on selected sectors. 80379416New skillsAmong the many changes brought about by COVID-19, rapid tech adoption was one of the major ones which disrupted businesses all around the world. The pandemic has changed the whole paradigm and the programs have been redesigned to adopt to the current phase of the IT Sector. “Most of the companies have expedited their automation process, even for the simplest of things. A lot of changes are about to come. Formal skill training will become an important part of all organisations. Skills related to automation and AI-related jobs, digital management, anything to do with contactless, will be given a priority,” Dutta said. She added that we will need sensitivity around skills that were becoming very popular and possibly driving jobs in the coming months. We need to ensure that the people need to be skilled in jobs that are digitally alternate to their current ones. She cited an example of a former mechanic who will now be required to understand how to deal with an automated system, which can help him do the job better. “We will need more technical skills compared to what we currently have,” she said. For people to acquire these technical skills, the country requires the right infrastructure. Even before the need for technical skills arose, there was a huge problem of the poorly trained workers from the informal sector. These were the self-taught workers who would observe and learn rather than taking time off from their current job to learn a skill from skilling centres.“The government needs to work on providing bandwidth and connectivity across the country. It needs to be in the remotest parts of the country to enable skill training through digital platforms. They need access to hardware for the same, so they can learn different skills. Many organizations are creating learning content through videos online and the government should ensure that this reaches the last-mile users,” said Neeti Sharma, Senior Vice President, Teamlease Services. 80379458She also advocates linking diplomas and degrees to what people are learning remotely. Since the National Education Policy has recognised online degrees, she believes the government needs to create a database of universities offering online degrees and diplomas which will help tremendously in uplifting the informal sector. She envisions a future where 30-40% skilling will be face-to-face and nearly 60% will be through virtual learning and very little will remain for on-the-job. Need for social securityAnother factor which had been plaguing not just the skilled labour segment of the workforce but the entire labour market is the lack of social security. Losing lives during the lockdown phases and reverse migration shed light to the plight of labourers and the deplorable work conditions they live in. “Today you have social security only if you are in the formal sector. The Employment Provident Fund Organisation (EPFO) covers only 10-15% of the working population, which is really low. Therefore, social security needs to be more universalized and not sector-focused or state-sponsored. If it is state-sponsored, then there will be issues of lack of productivity, lack of reach, administrative cost of delivery, etc.,. You need to nurture platforms for this and they can be charged for social security. Don’t allocate funds from the budget to a board and then take away the accountability. The moment you aggregate platforms, skill gets standardized and social security becomes a norm,” Vasudevan said, adding that the government needs to stop looking at skilling as a sponsorship. In the meantime, the new labour laws introduced appear to have covered social security under their umbrella. They have also included the gig economy and platform workers such as cab drivers, delivery executives, freelance content writers. The scope of EPFO has also been broadened and includes all institutions employing 20 or more workers.
Categories: Business News

WhatsApp row: FB faces questions from govt panel

Business News - January 22, 2021 - 2:03pm
Facebook executives will field questions from an Indian parliamentary panel on Thursday about the changes to WhatsApp's privacy, a source said, days after the messaging platform was asked by the country's technology ministry to withdraw them. The panel will ask why Facebook needed to change WhatsApp's privacy policy and how it will impact users, the source said. WhatsApp did not immediately respond to Reuters request for comment. The messaging platform earlier this month kicked off a storm when it informed users it was preparing a new privacy policy, under which it could share limited user data, including phone number and location, with Facebook and its group firms. Demand for rival applications such as Signal and Telegram surged on privacy concerns and WhatsApp last week decided to delay the new policy launch to May from February. With 400 million users, India is WhatsApp's biggest market, and the messaging service has big plans for the country's growing digital payments space, including selling health insurance via partners. Facebook last year invested $5.7 billion in the digital unit of Mukesh Ambani-led conglomerate Reliance Industries, with a big part of that aimed at drawing in ten of millions of traditional shop owners to use digital payments via WhatsApp. Earlier this week, India's Ministry of Electronics and Information Technology said in an email to WhatsApp boss that the new privacy policy terms take away choice from Indian users.
Categories: Business News

The mantra to play the market right

Business News - January 22, 2021 - 2:03pm
If you want the market to reward you with the best, then you have to face it at its worst, says Ravi Dharamshi, Founder & MD, ValueQuest Investment. The last leg of the journey to 50,000 was pretty fast. How much faster are we going to move after reaching this particular milestone?It is definitely a wonderful milestone. I used to think that this is more of a symbol. How does any kind of level really matter? But at times like these, making a lot of noise makes sense so that people will become aware of equities. It is sad that despite the kind of wealth creation that has happened in equities, not many people have benefited from it. There has to be greater participation from the people at large in India so that they can benefit from one of the largest passions of capitalism, where you can make your money work for you and gain financial freedom. What do you feel are going to be some of the key trends in terms of the makeup of the Sensex or the Nifty?Leaders of every bull market are different and keep changing, there are certain companies which keep on reinventing themselves but apart from that, very few companies last beyond a couple of decades in the top decile. One has to figure out which are the companies that have a business model that can be reinvented, has a culture that can survive the ups and downs and a balance sheet that can survive a downturn. They are gaining market share and are constantly expanding their addressable opportunity. There are very few companies that do that but even some companies that do not manage to do that can also be very good wealth creators in a transitionary period. Having said that, clearly the new wealth creators are the digital companies. Going forward, that is what the world is heading towards. It is being eaten up by software and that software is being written in India and now there are new business model innovations along digital lines. There are platform companies and they are in a category where they have a winner take it all kind of economics. So, there will be a few large winners even out of India over the next three, four, five years. A lot of these private companies with new age business models will get listed in India. They will look expensive and I do not think they will get much cheaper from where they list. What does a retail investor have to look forward to going ahead?The first thing that any retail investor needs to do is make sure they have exposure to the equity market -- directly or via mutual funds or PMS. If you do not have the capability to understand the markets or react in an opposite manner to the emotions that the market throws up, then you give it to a professional who can do it for you but having said that, SIPs work very well. SIP flows have been very steady and that takes care of the emotions that the market can bring out in you. SIPs definitely are one way for retail investors to invest as constant flow of money can keep pouring into the market. It is not a three-year, five-year product. One needs to understand it is a 20-year product and magic can happen over 20 years.When you keep putting small amounts of money over 20 years’ time, it can become a great huge banyan tree which will keep giving fruits for a long period of time.How has been your journey so far in the stock market?It has been a topsy-turvy and a wonderful journey. There was a time when everybody was down in the dumps. One particular instance comes to my mind. When in 2004, the NDA-1 government lost and the market was down 20%. That was my first experience of what can happen in the market. And of course it kept on getting repeated a couple of times on the upside as well as on the downside but one cannot forget those times. As Mike Tyson says, everybody has a plan until you get punched in the face. The market keeps punching you time and again and you have to figure out how you are going to handle those punches. But if you can handle those punches and come back, then the market is going to be very rewarding for you. Did you think that we could reach 50,000, especially in a pandemic year?No, there is no way I would have thought that we are going to hit 50,000 at the beginning of this year. Yes, there was a strong belief that we are going to do way better than what most people are expecting but the kind of up move has surprised even the most optimistic ones. The good part is that it is not only purely speculative, it is backed by some earnings upgrades and some economic revival so that gives a lot of confidence that there is a floor at some level, we are not going back to the levels that we saw in March. If the market corrects, invest more. That is the only way to overcome this fear of losing out or fear of correction. You have to spread it out. What would you tell the retail investors those who have not cherished or enjoyed or even participated in the rally that has played out from the March lows?The first thing to do is just get some exposure, do not worry about the correction, do not worry about timing the market and have a longer term horizon. If you can think in decades rather than in months or weeks, then you will be way better off. In 1979, Sensex was 100 and it went to 1000 in 11 years, that is 10x move in 11 years. The next 10x move came in 15 years and the next 5x move has only come in about 15 years. Since 2006 till now, we have moved up 5x. I would believe that the next five years are going to be way better than the last five years in terms of market returns and in terms of economic performance. So do not worry about the correction that is coming. There is no way you can avoid it, the only people who say you can avoid it are fools and liars. It is okay to live through that, if you want the market to reward you with the best, then you have to face it at its worst.
Categories: Business News

Indians must learn to capitalise on volatility

Business News - January 22, 2021 - 2:03pm
We are extremely bullish on India but nothing will be very linear. Post-Budget there could be a correction in the market. One should learn how to capitalise these bouts of volatility, says Sandeep Tandon, Founder, Quant Group. Sensex@50K. Give a reaction which captures the mood and the kind of rise we have seen.Good news is that despite the Sensex being at a lifetime high, risk appetite and liquidity are still rising which is a very positive news for India. It is not that it has peaked out from a longer term perspective. Majority of the market was worried for some time over the markets peaking. So it is good news. In March 2020, we discussed how risk appetite was at life time low and liquidity was at lifetime high. That was a lethal combination for a bull run and it has played out very well. I am iterating that the Indian risk appetite is still rising as compared to developed markets where we are seeing some sort of exhaustion. And this is the case with emerging markets also. All the naysayers are wondering how much more the market can go. Vijay Kedia believes that we will hit 1 lakh on the Sensex within the next 10 years. Do you also believe that the market has miles to go and 50,000 is one of the milestones?I will look at much larger perspectives. We have been talking about how the next 10 years belong to Asia and Asian centric emerging markets. A new trend has begun where emerging markets have the potential to outperform the developed markets. But keep in mind that the entire move will not be linear. There will be sharp corrections in the market and it may come post Budget. In fact the Budget could be a trigger because globally, risk appetite for the developed market is peaking out this is clearly reflected in the way Bitcoins have peaked out and we have seen a sharp correction. Similarly, we are seeing some signs of complacency across the US parameter which we track very closely. There were some early disturbing signs from the dollar index. In the first week of January, we talked about how the dollar index was at the cusp of inflection points. Since then, it has rallied a bit. So, right now it is in consolidation but from a very near term and medium term perspective, the dollar has the potential to rally further. That will not be good news either for the emerging markets or for India. As of now, it has not completely reversed. We have seen one uptick and some amount of consolidation. The bad news is that there has been a consensus that the dollar has peaked out and it will keep on correcting and keep on drifting. The global consensus is that the dollar will correct further. I am not looking from a very near term perspective. In fact, we have a contra view that may be for next quarter or two, the dollar has the potential to reverse. That means, bouts of volatility can come back to emerging markets including India. So, do not expect a linear move which we have seen from March till now. The first rally in the market was led by IT and financials, then IT and pharma and now it is back to value which is PSU, industrials and cyclicals. From here, what will be driving the markets higher?From a very near-term perspective, Budget on 1st February is very important. The expectations are very muted but typically close to the Budget, we have seen infra stocks and certain value stocks moving up. We are in that phase right now from a very near-term perspective. But from a longer term perspective, for the next two-three years, our view is that growth has peaked out globally and they are in the final stages of peaking out and value will make a comeback. We have a constructive view on commodities from a longer-term perspective. I am not talking about just one or two quarters’ perspective. I have a three-year horizon. We are more positive about emerging market commodities which is an endorsement for value stocks and globally a lot of fiscal stimulus will happen which is also inflationary but it will support the value stocks. So as a theme, I will like to remain overweight in value stocks. From a behaviour perspective, it is a neglected territory. I was quite bullish on metals stocks in September. You have seen what sort of performance the metal stocks and cement stocks have given. I will remain constructive on them from a three-year perspective. But nothing will be very linear and one will see bouts of volatility and steep corrections because we believe our predictive analytic tools are endorsing that from 2018 till 2023, the employed walls of the global asset class will remain elevated from a longer term perspective and one will have to trade in these themes also. Everyone has been watching out for the low base effect to kick in and expecting earnings to deliver, How are you reading into the trend?This earning season will end with budgets being around the corner. The earnings related momentum has led to some amount of positive rather than negative surprise. The session is about to end and from a longer term perspective we talked about pharma as a theme and IT as a theme. These two themes will continue from a longer-term perspective and would be getting support from the value stocks or neglected stocks. For the next three years, the theme will be neglected territory, beaten down names, under owned and undervalued stocks as compared to the most admired and most expensive stocks which was the theme from 2013 onwards. These were the Nifty 30 stocks or Nifty top 10 holdings, which have done extremely well. We have seen a very skewed rally from 2013 till early part of 2021. That momentum will decline. So we are very cautious about the most admired category and are pruning our exposure here. Does that mean higher quality midcaps or does that mean sectors or pockets that you feel have been ignored?We always give more weightage to the sector as a theme. If I like IT or pharma with value as a theme, then these stocks within the midcap space will do very well, rather outperform the largecaps. We always believe that if risk appetite keeps on rising, which has been the case from March 2020, then midcaps and smallcaps have the potential to outperform the large caps. This theme has done well in the last few months. As value is coming back, mid and smallcaps have potential to outperform the largecaps both from the medium and longer term perspective. But I always give a caveat, do not expect a linear move. So the up move would not be linear. There will be phases when midcaps and smallcaps after meaningful upside, would have the potential to underperform large caps. That is the cycle which will keep on playing from next three years’ perspective, But relatively, we are more convinced about midcaps and smallcaps because we believe that these are the sectors or indices which have underperformed badly from 2018 and it is their time now to look up. Therefore, we would like to keep a more positive bias for this space compared to large caps. How has the personal journey been for you tracking the market?I am not from Mumbai. I came to Mumbai first in 1992-93. We have seen the changes happening from those days. I was closely associated with the Badla Market and tried to learn how to read the Badla from the behaviour perspective. That was one of the early benefits I got when I started early in the derivatives space. I do not have very specific moments but we are looking forward to many more milestones which Sensex will achieve over the next 10 years. Tactically, do you need to protect capital right now or would you say this continues to be a buy on decline market?Just to give you a much larger perspective, we have been saying that 2020 onwards till 2028 or 2030 will be the most challenging environment globally. It will be a wealth destructive phase. We have seen one round of massive wealth destruction and then we have seen a recovery. Our view from a much larger macro perspective, which is based on arithmetic and global liquidity is that a bubble is getting built in many pockets. Our main worry is about developed markets, western markets and anything from the US perspective. In the beginning of this quarter or maybe February onwards -- post budget -- I expect there will be a correction in the markets. I expect maybe two quarters of global correction. But India and Asia-centric emerging markets have the potential to delink from the US markets. So in a 8-10 year horizon, we are extremely bullish on the emerging markets and India in particular. In India, a buy on dips strategy would be very effective but we have to keep in mind that in the larger perspective, we are talking about a very volatile phase. We define it as a volatility expansion phase. In this phase the traditional approaches and thinking will not work. We will have to manage and protect wealth with more agility in a dynamic way of money management. The agility will help us accept the changes which are happening globally and people who are willing to adopt these changes will be more successful as compared to traditional thinkers. 2020 has taught us a lot of things and even from the money management perspective, a lot of things will change going forward. We are extremely bullish on India but we have to keep in mind nothing will be very linear and one should learn how to capitalise these bouts of volatility. Most of the investors generally do not like volatility but in my nearly three decades of experience, we have learnt that volatility is very important not only from the forecasting perspective but also how well you capitalise on these bouts of volatility. That is something which most of the Indian investors have to learn. We have seen extraordinary panic situations or extraordinary euphoria in emerging markets or India as compared to developed markets. We have to learn how to manage volatility.
Categories: Business News

Citroen to bank on SUVs and localised vehicles

Business News - January 22, 2021 - 2:03pm
New Delhi: French car maker Citroen, which is set to enter the Indian market later this year, is banking on heavily localized vehicles and Indian consumers’ marked preference for sports utility vehicles to emerge as a major player in the country over the next few years.Roland Bouchara, senior vice-president (sales and marketing) at Citroen India while conceding that India is a ‘tough market’ said it also presents a huge opportunity to Citroen over the next few years to evolve into a major player. “Passenger vehicle sales in India are expected to grow to 5 million units per annum over the next few years. Secondly, the share of SUVs in overall PV sales has been rising. With this kind of segmentation and given our portfolio, we are confident we can emerge as a major player here”, said Bouchara. He, however, declined to specify any sales or market share targets for the company mid-term.As many as 707,152 SUVs were sold in the local market last year, which is a decline of 6 per cent compared to 754,892 units sold in 2019. Passenger vehicle sales last year declined at a faster clip falling by 18 per cent to 2.43 million units. The share of SUVs in passenger vehicle sales in the country increased to 29 per cent last year, from 25.6 per cent in 2019.Citroen will commence its product offensive in India with the launch of premium SUV Citroen C5 Aircross shortly. This would be followed by vehicles developed on a new platform (CMP), which will be positioned in the heart of the market and are being especially designed and developed keeping in mind the needs of Indian consumers. The vehicles will have localisation content upwards of 90 per cent.Bouchara added, “There are not many OEMs who came to India with a new platform. We have also localised the gearbox and the powertrain even before launching our first vehicle, which no other manufacturer operating here has done. We have made small changes in our strategy based on our learnings from the market.”Citroen declined to share the timeline for launch of the first vehicle on the new platform under the C-Cubed program, but said it will introduce a new vehicle every year in the country to shore up volumes, starting 2021. Groupe PSA is investing over Euro 100 million in the new platform (CMP), which will spawn the new range. Citroen expects India to emerge as one of the biggest growth drivers for the brand in the next five years. Bouchara informed the company has already appointed the dealers for covering the top 10 metroes with the Citroen C5 Aircross. The distribution network will be expanded further ahead of the launch of the mass segment vehicles. The C5 will be available in diesel fuel option, engines for which will be assembled locally. The vehicles developed on the CMP platform, however, will come strapped with gasoline engines.“The C-SUV is largely diesel driven. However, overall more than 75 per cent of passenger vehicles sold in the country today run on petrol. In certain markets like NCR, diesel vehicles can only run for 10 years, which make customers opt for petrol cars. To begin with, we will focus on petrol engines for vehicles under the C-Cube programme”, said Saurabh Vatsa, senior director (marketing and PR Operations), Citroen India.
Categories: Business News

BMW to bring 25 new products to India this year

Business News - January 22, 2021 - 2:03pm
German luxury automotive group BMW plans to bring 25 new products in India this year as it looks to accelerate sales growth, leaving behind the worst of the coronavirus pandemic. The company, which on Thursday launched its BMW 3 Series Gran Limousine priced between Rs 51.5 lakh and Rs 53.9 lakh (ex-showroom Delhi), expects growth in India to be in double digits this year on the back of an increasing demand for personal mobility and people indulging in luxury cars as international travels and holidays are curbed due to COVID-19. "As far as our business is concerned, the worst of coronavirus is behind us. In 2020 we saw business shut...This year we expect the full 12 months to be operational as compared to around eight months last year. Demand is also picking up," BMW Group India President Vikram Pawah told. Around November-December last year, the company had been able to achieve its pre-COVID levels, he added. When asked about the company's growth prospects this year, Pawah said,"We expect it to be really strong, in double digits." Pawah said there are two factors driving demand. One is the increasing preference for personal mobility in the aftermath of the pandemic due to health and safety concerns and the other, in the luxury segment in particular, people are looking to indulge in cars as they are not going for international holidays in exotic locations. In order to tap the opportunity, Pawah said,"BMW Group India will launch 25 new products." These will include eight all-new products, nice facelifts and eight variants. The BMW Group sells luxury cars and SUVs under the BMW and Mini brands while it is present in the motorcycle segment through BMW Motorrad in India. "We are also looking to create completely new segments such as we are doing with the 3 Series Gran Limousine," he added. The BMW 3 Series Gran Limousine with its elongated design, enhanced space, luxurious comfort and dynamic performance has been tailored with an innovative proposition that will attract young, progressive Indians who want a perfect combination of sporty performance and higher practicality for family usage in this segment, Pawah said. The new BMW 3 Series Gran Limousine is available in one diesel variant (BMW 320Ld Luxury Line) priced at Rs 52.5 lakh and two petrol variants -- BMW 330Li Luxury Line tagged at Rs 51.5 lakh and BMW 330Li M Sport 'First Edition' priced Rs 53.9 lakh.
Categories: Business News

India's vaccine diplomacy in Asia push back China

Business News - January 22, 2021 - 2:03pm
NEW DELHI | KATHMANDU: India will give millions of doses of COVID-19 vaccine to South Asian countries in the next few weeks, government sources said on Thursday, drawing praise from its neighbours and pushing back against China's dominating presence in the region. Free shipments of AstraZeneca's vaccine manufactured by the Serum Institute of India, the world's biggest producer of vaccines, have begun arriving in the Maldives, Bhutan, Bangladesh and Nepal. Myanmar and the Seychelles are next in line to get free consignments as India uses its strength as one of the world's biggest makers of generic drugs to build friendships. "The government of India has shown goodwill by providing the vaccine in grant. This is at the people's level, it is the public who are suffering the most from COVID-19," said Nepal's Minister for Health and Population Hridayesh Tripathi. The gesture comes at a time that India's ties with Nepal have been strained by a territorial dispute and Indian concern over China's expanding political and economic influence in the Himalayan nation sandwiched between the Asian giants. China, which had promised Nepal help to deal with the pandemic, is awaiting Nepali clearance for its Sinopharm shots. "We've asked them to submit more documents and information before we give them the approval," said Santosh K.C., spokesman for Nepal's department of drug administration. Bangladesh was supposed to get 110,000 doses of vaccine free from Chinese firm Sinovac Biotech, but Bangladesh refused to contribute towards the development cost of the vaccine leading to deadlock. Bangladesh has instead turned to India for urgent supplies and on Thursday was due to receive 2 million shots of the AstraZeneca vaccine as a gift from India. "India is making the AstraZeneca vaccine which makes all the difference. It can be stored and transported at normal refrigerated temperatures and countries like Bangladesh have that facility," a Bangladesh health official said. India for years has struggled to match the pace of Chinese investment in countries such as Sri Lanka, Nepal and the Maldives, where China is building ports, roads and power stations as part of its Belt and Road Initiative. But the demand for vaccines in these countries desperate to revive their tourism-dependent economies has offered Prime Minister Narendra Modi's government a way to claw back ground, diplomats say. India is considering giving away anything from 12 million to 20 million shots to its neighbours in the first wave of assistance over the next three to four weeks, one government source said. India is also helping with the training of health workers in some of these countries and the setting up of the infrastructure to administer the shots, the source said. "It's a well-crafted, calibrated series of actions you are seeing, they confirm the validity of our 'neighbourhood first' policy," said a former Indian ambassador, Rajiv Bhatia. "It plays to our strengths in science and pharma, and this is our moment to shine." 80381449
Categories: Business News

Fuel prices rise again, reach new highs

Business News - January 22, 2021 - 2:03pm
NEW DELHI: Petrol and diesel prices rose sharply again on Friday reaching new all-time high levels as oil marketing companies decided to break the pause in revision of auto fuel prices to bridge the widening under recovery.Accordingly, the pump price of petrol increased between 22-25 paise per litre across all major metros on Friday while diesel price increase ranged 23-27 paise per litre.With this, petrol is now priced at Rs 85.45 a litre in Delhi as against previous days price of Rs 85.20 a litre. Similarly, in Mumbai petrol price increased to Rs 92.04 a litre, a 24 paise increase from previous days price of Rs 91.80 a litre. In Chennai and Kolkata, petrol is now priced at Rs 88.07 and 86.87 a litre respectively, registering an increase of 22 and 24 paise per litre from the previous day.Diesel on the other hand faced sharper increase, rising by 27 paise a litre in Mumbai from previous days' level of Rs 82.13 a litre to Friday's retail price of Rs 82.40 a litre. In Delhi, diesel rose 25 paise per litre to Rs 75.63 a litre, in Chennai by 23 paise per litre to Rs 80.90 a litre and in Kolkata by 26 paise per litre to Rs 79.23 a litre.The increase in retail price of auto fuel came on a day when global crude prices showed some signs of softening declining by less than one per cent to close to $ 55 a barrel. Crude prices have remained firm for the last couple of weeks in the wake of unilateral production cuts announced by Saudi Arabia and a pick up in the consumption in all major economies globally.The increase in the petrol and diesel prices is the third such revision this week. The auto fuels had risen sharply by 25 paise per litre each on Monday and Tuesday before the OMCs decided to give relief to the consumers from frequent price rise for the last two days.With Friday's revision, the pump price of petrol and diesel has now increased by Rs 1.74 and Rs 1.76 per litre respectively in January so far with OMCs' deciding to break an earlier longer period of pause increasing the retail prices for the first time this year on January 6. The price had been raised on six different days since then.The last few increases in pump prices in petrol and diesel has taken its price to record levels across the country in all major metro cities and other towns. The last time the retail price of auto fuels were closer to current levels was on October 4, 2018 when crude prices had shot up up $ 80 a barrel.The current price rise is largely on account of the steep increase in the central taxes of petrol and diesel and firm crude prices.Petrol price was very close to breaching the all-time high level of Rs 84 a litre (reached on October 4, 2018) when it touched Rs 83.71 a litre on December 7, 2020. But the march had been halted ever since then with no price revision by the OMCs in the month. The price rise started again only on January 6.Oil companies' executives said petrol and diesel prices may increase further in coming days as retail prices may have to be balanced in line with the global developments to prevent OMCs from making losses on sale of auto fuels.
Categories: Business News

We should never waste a good crisis: Pawan Munjal, Hero MotoCorp

Business News - January 22, 2021 - 2:03pm
Since the easing of the lockdown, the company has successfully managed to increase its market share and is now poised to aggressively expand globally, venture into EVs and clock the next 100 million units in production milestone in next 10 years. “I say this often that we should never waste a good crisis,” Hero MotoCorp Chairman and CEO Pawan Munjal tells ET. Edited excerpts :Today is a big milestone for you - 100 million production. How do you see the next growth phase?Today is indeed a big milestone. Not just for us, but also for India and India’s inherent capabilities. We are one of the fastest to achieve the 100 million sales milestone and also the only Indian automotive company to achieve this landmark.Thirty-seven years ago, we did not see this coming and definitely not in this kind of environment. We took 29 years to reach the first 50 million and 7 years for the next 50. Now that we have achieved this landmark, we are not going to rest on our laurels and aim to achieve the next 100 million by 2030 – over the next 10 years. There is immense scope for growth both within India and our markets outside and we are poised to make the most of these opportunities. Hero MotoCorp has managed to grow sales over the past few months and has also registered substantial gains in market share since the easing of the lockdown. How confident are you of sustaining this momentum going ahead? For the entire decade that just finished, we have continuously registered sales growth and we have been on an upward trajectory in terms of global expansion, technology development and of course maintaining our leadership.The year 2020 was unprecedented and so were the challenges that came along with it. However, the entire Hero ecosystem came together to demonstrate resilience, motivation and belief to register record-breaking growth.This makes me immensely proud of what we managed to achieve. This also gives me the belief that we will continue our growth journey in the future as well.We have had lots of learnings during the past year and we have also aligned our forces towards the future. We have a clear vision and roadmap of what we want to achieve and therefore I am confident that we will register growth both in India and international markets in the times ahead.Hero MotoCorp announced plans to invest Rs 10,000 crore over the next 5-7 years in February. Under the current circumstances, how are you evaluating those plans? Will you delay these investments?I say this often that we should never waste a good crisis. While 2020 brought enough challenges, it also gave us the opportunity to relook at our operating models, huddle around as teams and find new roads to success.Our performance since the lockdown is proof that we were able to manage this adverse situation well. You will remember that last year at CIT I shared the new vision of the company, ‘Be the Future of Mobility’. We are now clearly focussed on realising our vision and mission through strategic new business decisions.We will continue to focus on further strengthening R&D strength, new mobility solutions, premium range of products and expansion in international markets.What is your strategy for growing Hero’s presence in the premium end of the market and maintaining your leadership position? Global markets?As I said, we have a clear vision for the next five years, during which time we plan to launch 10 products every year – including new products, refreshes and variants. This will also include new premium products in the higher engine capacity segments.Out of these 10 products each year, two-thirds will be scooters and premium motorcycles. This will enable us to witness growth in new segments.We also have a strong focus to expand our business operations outside India and also increase our presence in the existing global markets. Our new slogan for the Global Business is R4 – Revitalize, Recalibrate, Revive and Revolutionize. As we speak, we have just finalised our entry into the Mexico market. We have also strengthened our business operations in Nicaragua and Honduras by appointing new distributor partners there. Covid-19 is seen as a black swan event by companies and governments. What are the learnings from this pandemic for you? Will this change the way business is conducted? At Hero MotoCorp, we were probably among the very first companies to anticipate the oncoming crisis due to Covid-19, and constituted a Business Continuity Task Force under my direct supervision.The agility, willingness, leadership and resilience displayed by our motivated teams make me believe that we are on the right track. We have come a long way in the past year, making significant progress in our operations, work-culture and organizational structure. This has put us in a great shape to tackle any new challenges in the future.Work-from-home, digital meetings, online sales, remote collaboration, and crowd-sourcing have been just some of the key new learnings that have been converted into opportunities to drive positive results.We also made the most of this period by upskilling our staff, optimizing finances and operations, and pledging to become even more eco-friendly through our operations and products.How do you think the EV landscape will evolve in the next few years?For EVs, we have a three-pronged approach – one through our own internal project at CIT, the second is at Hero Hatch – our internal start-up, and third, through our investment in Ather.So, we have a strong multi-pronged approach as far as the EV segment is concerned. 77394451
Categories: Business News

Rhizen receives USFDA orphan drug designation for cancer drug

Business News - January 22, 2021 - 2:03pm
New Delhi: Drug firm Alembic Pharmaceuticals today said the US health regulator has granted orphan drug designation to its associate company Rhizen Pharmaceuticals SA's RP6530 used for treatment of cancer. The US Food and Drug Administration (USFDA) has granted orphan drug designation for Tenalisib (RP6530) for the treatment of patients with peripheral T-cell lymphoma (PTCL), Alembic Pharmaceuticals said in a BSE filing.The USFDA grants orphan drug designation to a drug or biological product intended to treat a rare disease in the United States. "A number of incentives are provided for an orphan-drug such as 7-year marketing exclusivity, tax credits for clinical development costs, exemption/waiver of application fees and assistance from FDA Office of Orphan Products Development (OOPD) during the process," the company added.Earlier this month, the USFDA had granted fast track designation to Rhizen Pharmaceuticals SA's RP6530. Fast track designation is awarded to drugs that treat a serious condition and fill an unmet medical need. Stock of Alembic Pharmaceuticals was at Rs 530.30 on the BSE, up 0.22 per cent from its previous close.
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What to do when high PEs give you jitters? Here’s the answer

Business News - January 22, 2021 - 2:03pm
Price-to-earnings or P/E ratio, the most used and abused valuation metric in the stock market, is a simple one. And perhaps that is why it has such widespread use. Investors use it as a shortcut for valuing stocks. So, a company with a P/E of 10 becomes cheap while the one with a P/E of 50 becomes expensive.P/E is the ratio of profit after tax to the total number of shares outstanding. Another way of calculating it is to divide the share price by the EPS. Finding the share price is simple. Complexity starts with calculating earnings. It could be TTM (trailing 12-month earnings) of current/previous year or projected earnings for the forthcoming year.The P/E ratio tells you the number of years at constant profits it will take to return the investment. So, a stock with a P/E of 30 means, if the profit remains the same, it will take 30 years for the investment amount to come back to the buyer.One of the biggest challenges of earnings is that it does not take into account the capital structure of a company. In simple terms, it means it completely disregards the debt taken by a company.The P/E ratio tends to capture the agony and ecstasy of the market. When the market is in the bear phase and investors are despondent about the future, P/E ratios of companies and indices will contract. Exactly the opposite happens during a bull phase.Ben Graham used the P/E ratio to determine a “moderate upper limit to stay within the bounds of conservative valuation.” On the other hand, William O’Neill, the father of CANSLIM, said “Contrary to most investors’ beliefs, P/E ratios were not a relevant factor in price movement.”In his detailed study of stocks between 1953 and 1988, O'Neill found that the average P/E before a stock made a major bull move was 20 as opposed to the average Dow P/E of 15. Even in the Indian market, anecdotal evidence supports the fact that there are some perpetually high P/E stocks like Asian Paints, Berger, Nestle, Page Industries, Symphony, Pidilite, D’Mart (Avenue Supermarts) and Titan.PI ratio (P/E to Index)Divide a company’s P/E with that of the index (Nifty) to calculate the PI (PE to index) ratio. For example, say Asian Paints has a P/E ratio of about 125 while Nifty P/E is about 37. That is, a ratio of 125/37 = 3.3 times.In January 2006, the same ratio was 28/17 = 1.6. In January 2015, it was 60/21 = 3. If you do this exercise, you will find that Asian Paints usually trades between 1.5 – 3.5 times of PI (PE to Index) ratio. You can do a similar exercise for the stocks you are interested in and find the range.The PI ratio tells you how much a stock is being valued by the market with respect to the overall market.Valuation worriesNever sell a stock on high valuations. It is always best to have a trailing stop (a stop loss that keeps trailing the price as the stock price moves upwards), because stocks can remain at a high P/E or can go to a higher P/E during a major bull phase, and selling out early often means you are not participating in the most explosive phase of price rise.Again, if you followed this suggestion, you would be comfortably riding stocks like D’Mart even at 100-plus PE, earning the wrath of value investors. The only exception to this is if you are invested in a very illiquid stock, where you may need to start liquidating on the way up.In short, use the P/E ratio as a general guide to understand how a stock or an index is being gauged by the market instead of using it as a valuation metric.
Categories: Business News

Yesterday once more? Market has a stock of worry

Business News - January 22, 2021 - 2:03pm
The stock market crash of 2008-09 and the subsequent recovery in 2009-10 might seem like events of the distant past, but their shadow continues to loom over investor behaviour a decade later. Therefore, celebrations around Sensex crossing the 50,000-mark are relatively muted as market participants fret that the furious run-up in stock prices since March 23 has happened too fast — and too soon.The evident mistrust isn’t restricted to whether the Sensex deserves to be where it is. The hectic pace of the turnaround since the crippling sell-off in February-March of 2020 and a narrow pool of growth assets favoured by overseas funds have contributed to the sense of scepticism.The upshot is that many rich investors caught by surprise have ended up staying out. Furthermore, there is cynicism whether the market deserves premium valuations at this point as the economy just about limps back to normalcy while corporate earnings recovery remains more uncertain than they perhaps were a decade ago.Market participants see some similarities between the two eras — 2008-2010 and 2020 — especially in the way the market rebounded unexpectedly.After a near-one-way tumble from January 2008 — when the Sensex first crossed 20,000 — to 8,000-levels in March 2009, there was an abrupt turnaround led by foreign fund purchases and the government’s fiscal measures, propelling the index above 21,000 in November 2010.Similarly, in January 2020, the Sensex crossed 42,000 for the first time ever before slumping to around 25,000 late March. Since then, it has been on a one-way ascent, although there has been some hesitation before the 50,000-mark.Crest and TroughFor those who like to juxtapose different phases of the market, the question has been whether the indices would enter a long-winded downward drift — similar to the three years after December 2010.While there are similarities in the shape of the fall and the recovery between the two phases, the parallels mostly end there.One difference between the two phases is the duration of the moves; the decline and bounce in 2008-2010 were more protracted and long-winded.Moreover, the market cycle now is at a different stage compared to what it was then. The outperformance of emerging markets (EMs) over developed markets (DMs) had ended with the start of the global financial crisis in 2008. In contrast, many global investors now think the next few years belong to EMs like India.The biggest reason for this outlook is the bleak outlook for the dollar — weighed down by the near-zero interest rates in the US and gigantic stimuli by the American central bank and the government. Although the dollar index has shown signs of some resilience of late after the 12.5 per cent slide from March, the consensus trade for the long run is still ‘short dollar’, making EMs vulnerable to sharp bounces in the US currency.The question market participants are asking is what happens when these flows dry up, especially when local institutions have been selling fuelled by investor redemptions.A key risk to the stock market is the rising bond yield in the US on expectations that the Biden administration could further enhance the stimulus. Investors are concerned that unmatched doses of liquidity could result in inflation spiking sooner-than-expected, an outcome that some Fed officials have predicted could happen later in 2021.A Trillion-Dollar QuestionIf the US signals another package, yields could shoot up, sparking a dollar bounce. Although the rebound could be temporary, it will be enough to trigger a tempest in EMs given the recent flows from passive funds in gigantic proportions. India has been one of the biggest recipients.Although US Federal Reserve chairman Jerome Powell pacified markets recently that the Fed is in no hurry to taper the bond-buying programme, through which it pumps $120 billion into the system every month, the concern is whether it would be in a position to ignore markets if bond yields surge.Investors still have bitter memories of the ‘Taper Tantrum’ of 2013, sparked by the comments of the then-Fed chairman Ben Bernanke on cuts in bond purchases, comments that triggered panic in the global financial markets. Bernanke had to retract his remarks to calm markets.This time, Fed officials could be careful to avoid a ‘tantrum’, but it would be a different matter if the pressure emanates from the markets. That does not augur well for overbought EMs, especially when the dollar is oversold.
Categories: Business News

Bharat is doing better than India in entry-level white-collar gig jobs

Business News - January 22, 2021 - 2:03pm
New Delhi: Hiring for entry-level temporary white-collar jobs has shot up in non-metro cities, according to several companies that recruit such workers. Work-from-home, reverse migration and startups turning their focus to smaller cities as the next big market are among the reasons for this.Companies such as GigIndia, Taskmo, Quess, WorkIndia, JobsForHer and Urban Company said there has been a significant spike in both sign-ups and revenue coming in from such cities since the beginning of the pandemic.At GigIndia, for instance, 58% of candidates on the platform now come from Tier-II and III cities, versus 6% before the Covid-19 pandemic, said chief executive Sahil Sharma. Cities such as Bhopal, Indore, Jaipur, Patna and Lucknow have the highest sign-ups since the pandemic started, and contributed to a bulk of the revenue as well. Even smaller cities such as Guwahati, Thrissur, Amritsar and Shimla show early trends of growth, said Sharma.Most of GigIndia’s services, which include voice-based jobs like sales, marketing and outreach, are now remote.For Taskmo, which calls itself an “on-demand task fulfilment platform”, Tier-II cities and beyond now drive 65-70% of revenue, said cofounder Prashant Janadri. Before the pandemic, this was just 20%.The company, which has 1 million workers signed up, caters to lower-end white-collar jobs such as customer support, merchant on-boarding and background checks, as well as “upper” blue-collar jobs like warehouse auditing.Employers, especially startups, want to scale to more cities and are concerned about cost-optimisation, leading to an increase in demand for gig work.Sharma said GigIndia’s revenue would be 40% more than pre-Covid levels by the end of January.At Quess Corp, IT demand has nearly hit pre-Covid levels with entry-level IT in particular seeing a massive spike, said Lohit Bhatia, president of workforce management. “IT spends have really gone up. Even small brands have set up their own websites.”About 55% of Quess’ workforce comes from small cities and towns. “This will increase further to align with our demographic dividend,” Bhatia said.Many startups and small and medium companies are now open to flexibility, whether in the form of part-time jobs, or flexi-work, said Neha Bagaria, founder of JobsForHer, a portal dedicated to jobs for women. At JobsForHer as well, users from Tier 2 and 3 cities have gone up significantly since the pandemic.For Urban Company, which provides beauty and home repair services at home, Tier-II demand has rebounded much faster than Tier I, said senior vice-president of business Mukund Kulashekaran. Wages have increased 15-20% more than pre-Covid levels. While the bulk of the business still comes from the top eight metro cities, Kulashekaran said the company plans to venture into 10 more cities apart from the 18 they’re already in.For workers in small towns too, gig work is being seen as more lucrative than a full-time job, at least for now. At Taskmo, for instance, gig workers get paid Rs 100-500 per task, and Janadri says workers can earn Rs 700-1000 for five hours, making it an attractive option. GigIndia’s Sharma said gig workers make as much as Rs 35,000-40,000 a month for entry-level jobs, versus the usual Rs 20,000-25,000 for a full-time job.According to Kunal Patil, founder of WorkIndia, the proportion of gig jobs on his portal has gone up from 2-3% to as much as 17-18% now. A lot more jobseekers, especially from small centres, are open to doing a second or even third job for what he calls “top-up money”.For Able Jobs, a portal which trains and helps place candidates in entry-level white-collar jobs, candidates from non-metros have shot up to 40% from 25% earlier, said cofounder Ravish Agrawal. “There’s no creation of jobs at the local level,” said Agrawal.Agrawal said despite that, workers are not too keen on moving back to large cities, and would rather choose jobs where they can either work from home or want to move later. The company mostly does full-time roles.
Categories: Business News

Amazon offers to help Biden in vaccine distribution

Business News - January 21, 2021 - 2:00pm
Amazon has offered help to the US government in accelerating the distribution of Covid-19 vaccine, in a letter addressed to President Joe Biden.The world's largest online retailer has an agreement with a third-party occupational healthcare provider to administer vaccines at its facilities and are prepared to move quickly once vaccines are available, Dave Clark, chief executive of Amazon's worldwide consumer business, said in the letter.Letter to @POTUS: “Amazon stands ready to assist you in reaching your goal of vaccinating 100 million Americans in… https://t.co/KFnlAiRdG9— Amazon News (@amazonnews) 1611174905000"We are prepared to leverage our operations, information technology, and communications capabilities and expertise to assist your administration's vaccination efforts. Our scale allows us to make a meaningful impact immediately in the fight against Covid-19, and we stand ready to assist you in this effort," he said. The development was first reported by Reuters.This move comes as Biden became the 46th US president on Wednesday and has laid out a goal of delivering 100 million Covid-19 vaccine doses within his first 100 days in office.Amazon is the second-biggest private employer behind Walmart in the United States and currently employs more than 800,000 people in the country. In October last year, the tech giant had said that more than 19,000 employees had tested positive for the coronavirus."The essential employees working at Amazon fulfillment centers, AWS data centers, and Whole Foods Market stores across the country who cannot work from home should receive the Covid-19 vaccine at the earliest appropriate time," Clark said in the letter.Amazon had incurred more than $7.5 billion in incremental Covid-related costs in the first three quarters of 2020 and expects to incur another $4 billion in the fourth quarter, chief financial officer Brian Olsavsky had said in the company's earnings conference call in October last year.
Categories: Business News

Delhi residents support private liquor vends

Business News - January 21, 2021 - 2:00pm
NEW DELHI: A majority of residents of Delhi support privatisation of liquor vends as suggested by the State’s Excise Committee, while 73% Delhi residents support excise reforms proposed by the Delhi Government, a new industry report said.The report, by social community platform LocalCircles, said 54% residents of Delhi support privatisation of liquor vends, and that half the residents of Delhi support changes in minimum age to purchase liquor from 25 to 21 years similar to the regulations in other cities across NCR.The Delhi Excise Committee formed by the State Government in September 2019 had recommended changes in the excise policy for 2021-22 and sought suggestions from the public for the Cabinet to approve the formulation of the policy. It categorised its recommendation into five broad measures to augment state excise duty revenue, simplify liquor pricing mechanism, check malpractices and evasion of duty in liquor trade, ensure equitable access to liquor supply, and transform the nature of liquor trade.Liquor is one of the largest sources of revenue in Delhi, with the local administration reportedly earning around Rs 5,400 crore from its sale in 2019-20.The International Spirits and Wines Association of India (ISWAI), a representative body promoted by multinational alcoholic beverage companies, has been in dialogue with the Delhi government to streamline the alcohol business to optimise revenue to the state.The panel recommended minimising the Delhi Government’s presence in the liquor retail sector, that government vends need to be privatised and minimum age to buy liquor also be reduced to 25 from 21 years. The moves is aimed at improving consumer experience at liquor vends and to minimise loss of revenue to neighbouring states of Uttar Pradesh and Haryana.Currently, 60% of the liquor vends in the capital are owned by Government corporations, while the remaining 40% are privately owned.The report said 73% respondents were men while 27% were women and that all respondents were above age 25.The committee has also recommended that restaurants, bars and clubs be allowed to stay open till 3 am instead of 1 am, serving full bottles on tables and liquor in open areas such as rooftops and balconies also be allowed.
Categories: Business News

SAT drops subject tests, essays

Business News - January 21, 2021 - 2:00pm
MUMBAI: The College Board, the New York-based organisation which runs the Scholastic Aptitude Test, has scrapped its subject tests and announced its decision to do away with the optional essay, thus making the main SAT 50 minutes shorter in duration. Candidates are admitted based on SAT scores for undergraduate admissions in the US and to 40 universities in India, private and deemed.The subject tests were 20 multiple-choice standardised tests offered by the Board for individual subjects, taken typically to improve a candidate’s credentials for college admissions in the US. These hour-long 800-point tests were popular among Indians who completed high school from a local state or national board. The College Board, the standardized testing group, explained the doing away of these tests, stating, “We’re reducing demands on students.”However, over the years, the College Board’s Advanced Placement Testing Programme overlapped in its aim with that of the subject tests. Advanced Placement Programs or APs, which are longer and more intense, offer the opportunity to students to skip a prerequisite course typically taken in the first year of college and to start a higher-level course in the same subject.The ‘optional AP’ is also the name of college-level courses taught in high schools, and the AP diploma is accepted globally at top universities. In countries like India, where national boards do not offer APs as an addition to the high school curricula, independent centres will allow candidates to take the AP programme and the test to prove their academic prowess in top universities.The College Board, in a press statement, said, “The expanded reach of AP and its widespread availability means the subject tests are no longer necessary for students to show what they know.” While the College Board said it will no longer offer subject tests to US students effective immediately, it will phase them out for international students by summer.Karan Gupta, student counsellor and an expert in college preparation, said the decision partly reflected the shifting environment in terms of standardized testing. “The pandemic has shown us that colleges and universities have been able to admit students by looking at their high school grades, extracurricular activities, and holding interviews,” Gupta said.In the case of the essay too, top universities have found that essay scores, submitted separately, are not useful or essential for admission. Currently, most Ivy Leagues don’t require the essay scores in the SAT score docket. “We’re adapting to respond to the changing needs of students and colleges. This change simply streamlines the process for students who have other, more relevant opportunities to show they can write an essay as part of the work they’re already doing on their path to college,” said the Board.
Categories: Business News

5 stocks that will give stellar returns

Business News - January 21, 2021 - 2:00pm
Divi’s Lab and Sun Pharma can be outperformers. These are breaking out for a new cycle and the earnings can be expected to surprise on the upside, says Sanjiv Bhasin, Director, IIFL Securities It seems a little bit of focus is coming back to some of the private sector financials like Bajaj Finance. What is your view on earnings season so far?A large part of the earnings have been already priced in and there hasn’t been any negative surprise so far. The provisioning has gone up and they have suffered a bit because of the extension of the lockdown, particularly in the Maharashtra region, But Bajaj Finance has weathered the storm well. The stock has been a bellwether and has led from the front. I would think that Rs 4,700 was a very important base and that becomes key if you have to be in the large cap names which we think you should now. Bajaj Finance, which is a large NBFC, fits into that. But some of the smaller NBFCs have also weathered the storm well, particularly L&T Finance and M&M Finance. These are two of our top picks. They are also very good proxy plays to growth in two-wheelers and tractors and they could be better outperformers than Bajaj Finance. But Bajaj Finance, at these prices, will see a lot of buying because people would like to be in quality names. Right now, we also like to be in quality largecaps because with the Nifty at 14600, the room for error in midcaps may be a little less. In case of the auto basket, both auto and ancillary stocks seem to be gathering momentum? Tata Motors is doing very well.Correct. Who would have thought of this six months back when Tata Motors was below Rs 100? A disclosure, Tata Motors and Ashok Leyland have been two of our top picks all the way from Rs 120 and Rs 50 and they have been relative outperformers because we expected that the commercial vehicle market will bottom out much faster. Even though the recovery will be back ended, you will see a lot of positives. Tata Motors is going up not just because of the Tesla talks. It is more due to the commercial vehicle (CV) cycle turning and that is evident in some of the CV lenders. OEMs have been in the pink of health whether it is Balkrishna Industries, Apollo Tyres or a Motherson Sumi. The whole auto basket is the most coveted point right now because consumption is back and rural incomes have given another boost with the tractor and two-wheeler stocks doing extremely well. So stay focussed, but right now, the valuation is not on our side. We have seen a wall of liquidity and that will continue to drive the names which are hitting new highs. Tata Motors looks all set to touch Rs 295-300 and we would again advise doing a SIP rather than outright buying because the risk reward may not be favourable before the results. Asian Paints, Bajaj Auto results are coming out today. This earnings season is not really about growth but it is about valuations that these stocks are already clocking. Do you agree?Bajaj Auto and Asian Paints are getting bigger. Asian Paints keeps getting more and more expensive as it makes more forays with market share in the decorative segment. Bajaj Auto numbers have been a result of huge cost cutting and their export-centric model has played out very well. But I would be a little more centered on pharma names.There may be a huge surprise on some of the pharma earnings. A disclosure, two of our largecap top picks in pharma pack -- Divi’s Lab and Sun Pharma -- can be outperformers. Divi’s and Sun are now breaking out for a new cycle and I am very sure the earnings will surprise on the upside. Divi’s is headed to Rs 5,000 this year and Sun to over Rs 750. With Nifty at over 14,600, we want to be a little less beta on autos and metals which have run up far in excess of valuation. So, we will focus more on pharma, which would be one of the better performing sectors along with IT in 2021. For an investor, what is in store from a stock like Asian Paints or Pidilite? The PE multiples are almost 100! Do you think an investor is better off giving Asian Paints a skip? It is a great company but it may not be a great stock for the next couple of years.The people who have doubted Asian Paints and Pidilite have actually missed out and it is the same with Nestle. They do not trade cheap but the market psyche was that these are only monopolies getting stronger and it is the same case with some of the FAANG stocks where only market share has been gained. I agree with what you are saying. We cannot justify this price for Asian Paints but the problem is, on the ground level their unique model has suited all houses. So the myth that they would be the second hand paint and the cheaper paint is history. Their decorative segment growth has been one of the best. Two companies which have never diluted equity are MRF and Asian Paints and they have only kept getting bigger by size and by market cap. You cannot see much delta, much more beta on other stocks but as a core portfolio holding, very few people will let go of Asian Paints or MRF. So the house is divided. If you are looking for blue chips, then Asian Paints is one of them but if you want to make money, then maybe IGL, MGL are going to give you a 50% run given that gas utilities are in the best space. Is there money to be made in Britannia after the recent bout of underperformance?It is one of our top picks. We have had it in our portfolio and we continue to think that Dabur, Britannia and Nestle -- all three will be huge market creators. Britannia underperformed because there were some corporate disclosures where they were in corporate lending. Now that the company has clarified, it is a standard procedure. There was no other incident. The market got a little wary. The Morgan Stanley report says the rural reach of Britannia is there to stay. A lot of competition is coming from Nestle and from ITC. Sunfeast is a very big brand but you have to be part of all of them. So ITC, Nestle, Dabur and Britannia should be part of your portfolio because you cannot miss the consumption market which is raring to go. A disclosure, we are overweight on Britannia and Dabur. Any mid-tier company you are particularly confident of?Take it with a pinch of salt. At Rs 25, nobody wanted to touch IDFC First Bank. It has doubled to Rs 50. I can stick my neck out that this Diwali, it will go to Rs 70 and above. IDFC First is a big turnaround. I am very bullish on Mr Vaidyanathan. The book has done well, the CASA ratio, the net interest income and the transition from an MSME to a retail book. IGL and MGL have a lot of potential because the boom in autos has a cascading effect on the CNG, PNG side and in Delhi, Indraprastha Gas Ltd will see a price hike in the next few weeks. So, IGL fits the bill perfectly for a target of Rs 750. Among large caps, it has to be Divi’s Lab, Sun Pharma and ICICI. These five will make up a very big chunk of your portfolio and you could look for stellar returns.
Categories: Business News

No GST on electricity charges taken from tenants

Business News - January 21, 2021 - 2:00pm
In a significant ruling the Gujarat Authority for Advance Ruling for Goods and Services Tax (GST) has said a landlord does not have to pay GST on electricity or incidental charges recovered from tenants, in addition to rent as per lease agreement for renting of immovable property since the said amount would not be includible in the value of supply.The ruling came after Gujarat Narmada Valley Fertilizers & Chemicals Ltd approached the Gujarat AAR on whether electricity charges paid by landlord to electricity supply company for electricity connection in the name of landlord and recovered based on sub meters from different tenants should be considered as amount recovered as pure agent of the tenant.GST has a concept of “pure agent”, under which if you incur an expense while providing a service to your customer, then on satisfaction of all prescribed conditions, you need not pay any GST on the amount you recover over and above your charges in the capacity of pure agent.For example, if a property dealer charges you fees for suggesting a property to you, but also charges some additional money for doing the legal work of paying statutory charges. In this case, if the property dealer qualifies as your pure agent when paying legal fees, then GST would be applicable on only his fees (commission for finding the property) and not on the legal fees that he incurred on your behalf as a pure agent.In its ruling Gujarat AAR held that, “The applicant has cast an onus on the lessee to pay the charges in respect of the electric power used by them directly to the electricity company-it cannot be said that the electricity charges would be covered by Sec. 15(2)(c) of the CGST Act, 2017 for the sole reason that the rate for renting of premises has been fixed at an amount and the electricity charges are to be borne by the lessee as per the actual usage of electric power by them in terms of the agreement.”The AAR went on to state that while computing GST, electricity would not be included in the value of rent only when the rent agreement clearly states that the tenant would bear the electricity charges on actuals and rent is only the agreed fixed amount for staying in the propertyAccordingly, the said amount would not be includible in the value of supply - the decision would apply to specific agreement wherein the clauses of the agreement are specific to the effect that the lessee would bear the electricity expenses at actuals and the value of renting of the immovable property is a fixed amount which becomes the value of supply in terms of the statutory provisionsGujarat AAR also found the applicant qualifies as a pure agent. “The electricity charges collected by the landlord from the tenant at actuals based on the reading of the sub-meters is covered under the amount recovered as a pure agent in terms of the provisions of Rule 33 of the CGST Rules, 2017 in respect of the lessor - the decision would apply only in respect of the agreement under discussion and analogy of this decision would not be applicable to different set of circumstances.” According to Harpreet Singh, Partner, Indirect Taxes, KPMG India, while the ruling authority has held that the decision is applicable only in respect of the agreement in consideration, this ruling would still have wide ramifications, as generally the arrangement is similar where the landlord recovers fixed rent and electricity is recovered on actual. “Hopefully, this ruling would be sagacious enough to attract the eyes of taxpayers and the authorities, as the reasoning provided for non-applicability of GST on electricity appears to be cogent.” adds Singh.
Categories: Business News

Biden signs order rejoining Paris climate accord

Business News - January 21, 2021 - 2:00pm
US President Joe Biden has signed an executive order to rejoin the historic Paris agreement on climate change, a commitment that he made during his election campaign.The Trump administration on November last formally withdrew from the Paris accord, a decision originally announced three years ago, arguing that the agreement was disadvantageous for the US, while it gives benefits to countries like China, Russia and India. Former President Donald Trump had said the deal could be economically detrimental and cost 2.5 million Americans their jobs by 2025.The Paris accord committed the US and 187 other countries to keeping rising global temperatures below 2C above pre-industrial levels and attempting to limit them even more, to a 1.5C rise.Rejoining the climate deal was one of the few executive orders that Biden signed in front of a pool of reporters in the Oval Office on Wednesday soon after his arrival at the White House as the 46th President of the United States."...that's one I'm going to do while you're all here -- is a commitment I made that we're going to rejoin the Paris Climate Accord, as of today,” he said.Newly-appointed Special Presidential Envoy on Climate Change, John Kerry, said Biden "rejoined the Paris Climate Agreement, restoring America's credibility and commitment — setting a floor, not a ceiling, for our climate leadership. Working together, the world must and will raise ambition. It's time to get to work -- the road to Glasgow begins here."The new instrument of acceptance of the Paris agreement by US President Biden on January 20 was deposited with the UN Secretary-General the same day. The Paris agreement will enter into force for the US on February 19, according to an official statement.White House Press Secretary Jen Psaki told reporters that addressing the climate crisis was one of the four crises that Biden has identified will impact his administration, the American people as well as the global community. Rejoining the Paris accord is a vital step towards addressing the crisis."It will take approximately 30 days for that to take place," she said.Psaki said that the US continues to be one of the world's largest emitters of greenhouse gases. “And we need to put in place policies and take steps here to address that as well,” she said.Meanwhile, top Democratic lawmakers welcomed the decision to rejoin the Paris accord."This is an important moment for the climate movement, our country, and the planet. By re-entering the US into the Paris climate agreement, President Biden has reaffirmed our nation's commitment to leading the fight against the existential crisis of our time and to seizing the opportunity of a clean energy economy and safer future for all," Senator Ed Marky said.The Paris agreement recognises that global warming requires a global solution, including a collective commitment to greenhouse gas emissions reductions and clean energy solutions, he said.Senator Jeanne Shaheen said rejoining the Paris climate deal is a critical step to put the US back on track to regain the country's role on the international stage and to restore its reputation among US allies as a nation that keeps its word and is committed to global security and stability.However, top Republican senators opposed the move to rejoin the Paris agreement on climate change.“By signing this order, President Biden indicates that he's more interested in the views of the citizens of Paris than in the jobs of the citizens of Pittsburgh,” Senator Ted Cruz said.“Rejoining the Paris agreement isn't about ‘restoring America's leadership abroad' or ‘solving the climate crisis,' but instead it is about Democrats' plans to destroy jobs they don't like - including thousands of manufacturing jobs - and cede control of our energy future to other countries,” he said.At least half a dozen Republican senators announced their plan to introduce a resolution calling on President Biden to submit the Paris Climate Agreement to the US Senate for advice and consent as required by the Constitution before re-joining the treaty.“The Paris agreement is a bad deal for America and a bad deal for Kansas. The deal will kill jobs and raise the price of energy, hurting Americans when many are struggling to stay on their feet. It will punish American energy providers with expensive regulations, dole out US taxpayer money to foreign countries, and let China off the hook for their role as the world's largest polluter,” Senator Roger Marshall said."President Biden should submit this deal to the Senate to fulfil its constitutional role to advise and consent. Americans should always have a say in the international treaties signed by their leaders,” he said.
Categories: Business News

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