Gold is still ‘relatively cheap’ and could surge back toward its all-time high
Gold is still a “relatively cheap” investment opportunity and could keep rising even if it soon topped $1,900 per troy ounce, one strategist said Thursday. TD Securities head of global strategy Richard Kelly told CNBC’s “Street Signs Europe” that “gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.” The spot gold price hit an all-time high of $2,063 per troy ounce in August last year. However, Refinitiv data shows it now stands at $1,877. Gold was under pressure in the first few months of 2021. This came amid a sharp jump in U.S. Treasury yields as traders started to bet that inflation would cause the Federal Reserve to hike interest rates and taper its accommodative monetary policy. Gold is traditionally seen as a hedge against inflation but any attempts by central banks to rein in inflation is usually bad for bullion.
Oil settles higher on stronger demand outlook as U.S inventories fall
Oil prices settled higher on Wednesday as a drop in U.S. crude stockpiles reinforced expectations of improving demand ahead of the peak summer driving season, offsetting worries that a possible return of Iranian supply would cause a glut. Brent settled up 16 cents, or 0.3%, to $68.87 a barrel and U.S. West Texas Intermediate (WTI) crude settled up 14 cents, or 0.2%, at $66.21 a barrel. Both benchmarks pared losses after government data showed U.S. crude stocks at the Cushing, Oklahoma, storage hub fell last week to the lowest since March 2020. Refiners ramped up utilization rates to pre-pandemic levels. Russia said the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, should consider a possible increase in Iranian output when assessing further steps. OPEC+ is bringing back 2.1 million barrels per day (BPD) of oil production through July, easing cuts to 5.8 million BPD. Their next meeting is set for June 1.
Mainland Chinese markets jump more than 2% as Asia stocks rise; investors watch regional tech shares
Mainland Chinese stocks led gains regionally, with the Shanghai composite rising 2.4% on the day to 3,581.34. Investors also monitored technology stocks in Asia-Pacific on Tuesday following gains for their counterparts overnight stateside. Singapore’s economy expanded by 1.3% year-on-year in the first quarter, official data released Tuesday showed. The country’s Ministry of Trade and Industry also announced Tuesday that it would maintain Singapore’s GDP growth forecast for 2021 at “4.0 to 6.0 percent.”
Indians invested ₹700 cr in U.S. markets via Stockal in FY 21
Global investing platform Stockal revealed that over 50,000 investors from India invested more than ₹700 crores in U.S. stock markets in companies like Tesla, Netflix, Apple, etc., in the last 12 months. “We saw more than ₹3,500 crores worth of transactions last year. There hasn’t been a better time to start investing abroad,” the company added.
Global property markets ready to soar this year on monetary, fiscal support
Average home selling prices have hit eye-watering levels in 2021 in some countries. That trend is expected to continue, driven by low mortgage rates, swift vaccine rollouts, and the easing of restrictions after deep pandemic-induced recessions last year. The global boom in property prices comes alongside soaring stock markets, which quickly bounced back from a slump on pandemic-driven economic damage and devastating job losses, to focus on unprecedented stimulus and the recovery at hand. Reuters polls of more than 100 property market experts taken May 11-24 showed big upgrades to house price forecasts for the United States, Britain, Canada, Australia, and Dubai compared with just three months back, outpacing expected GDP growth and consumer price inflation.
European stocks steady after Tuesday’s rout, eyes on U.S. inflation data
European stocks steadied on Wednesday after their worst selloff this year as strong earnings reports and signs of a speedy economic recovery offset concerns about a rapid rise in prices. The pan-European STOXX 600 index rose 0.2 percent after falling almost 2% on Tuesday as investors offloaded riskier assets on worries that rising U.S. inflation could lead to tighter monetary policy. European earnings are now expected to surge 90.2 percent in the first quarter, as per Refinitiv IBES data, up from a forecast of 83.1 percent growth last week. UK’s blue-chip FTSE 100 outperformed as data showed Britain’s economy grew by a stronger-than-expected 2.1 percent in March from February. Ample liquidity, a global semiconductor shortage and a recent rally in commodity prices are adding to fears of inflation as developed economies gradually reopen after lockdowns. All eyes will be on U.S. consumer price data for April that is due later in the day, with analysts expecting a 3.6 percent lift in year-on-year prices, boosted by last April’s low base.
Chinese bitcoin traders still wield ‘enormous influence’ despite Beijing’s 4-year crypto crackdown
Chinese bitcoin traders continue to thrive despite Beijing’s four-year crackdown on cryptocurrencies, experts told CNBC. China shut down local exchanges and banned initial coin offerings in 2017, but this year, there have been renewed fears of a harsher crackdown from authorities. Bitcoin’s price has been impacted by recent comments from industry bodies and regulators regarding cryptocurrency in China.
Bitcoin crash opens door to a tax loophole for investors
Bitcoin, ethereum, dogecoin and other cryptocurrencies have seen prices plunge in recent weeks. These investors can leverage those losses in a way that a typical stock or mutual fund investor can’t. That’s because the so-called wash sale rules don’t apply to crypto, according to financial advisors. But there are important caveats. Crypto investors may be shellshocked by a recent plunge in prices. But that sell-off has a silver lining: It opens the door to a money-saving tax strategy. Popular cryptocurrencies like bitcoin and ethereum shed more than half their value in volatile trading over the past month or so. A bitcoin investor who bought at the mid-April peak (around $65,000) and sold low on Wednesday (near $30,000) would have lost 54%, but crypto losses are treated differently than those of stocks and mutual funds. That’s because so-called wash sale rules don’t apply, according to financial advisors. This offers two benefits to crypto investors: They can sell crypto for a loss, and then use that loss to reduce or eliminate capital gains tax on winning investments. Then, they can quickly buy back the crypto they sold so as not to miss out on a subsequent rebound in price.
Japan can be an another good option for Diversification
Investing in international markets comes with various benefits. Investors benefit from diversification across different geographies, thereby spreading the investment risk across different economies. With value investing back in fashion, Japan can emerge as the next hotspot. The Bank of Japan has been one of the largest investors in Japanese stocks through exchange-traded funds. With nearly 30 trillion yen incremental investments (around $50 billion per year) since 2016, its presence can add another pillar of strength to the Japanese markets. While domestic institutional investors have not been favouring equities due to unpleasant experiences in the past, the recent run-up in global yields may push them to realign their investment portfolios from debt to equity. This can be another trigger for the next set of inflows into the Japanese markets. Japan has been a diversified market, with the financial sector, insurance companies, auto industries, manufacturing, and trading companies having a fair representation.
1. Dogecoin, Cryptocurrency
The cryptocurrency “meme coin” Dogecoin was created in 2013 as a joke poking fun at the surge in other digital coins. The latest surge has pushed Dogecoin’s market capitalization to $62 billion, which means it’s valued more highly than Ford and Twitter. In 2021, it has surged from less than half a penny to a record of nearly 75 cents.
The Dogecoin is the one being promoted by founder of Tesla and SpaceX Elon Musk.
The value of dogecoin dropped sharply in early U.S. hours on Sunday, after Tesla chief and cryptocurrency supporter Elon Musk called it a ‘hustle’ during his guest-host spot on the Saturday Night Live comedy sketch TV show.
Dogecoin was quoted as low as $0.47 on crypto exchange Binance, down 28% from levels around $0.65 before the show.
Should we Invest in Dogecoin?
Cryptocurrency has a “good chance” of becoming what he called “the future currency” of the Earth. But again at present, it is one of the riskiest assets to hold on to.
To boost the confidence in investors the company added that DOGE has proven to be a fast, reliable, and cryptographically secure digital currency that operates when traditional banks cannot and is sophisticated enough to finance a commercial Moon mission in full. It has been chosen as the unit of account for all lunar business between SpaceX and Geometric Energy Corporation and sets precedent for future missions to the Moon and Mars.
To read more about Cryptocurrency: Daily Market Analysis – 28th Apr 2021 – Fintoo Blog
2. Tyre Companies may have a speed breaker ahead
There has been a rising input price for the tyre companies which may result in underperforming of the shares of these companies. The prices of rubber and crude have risen sharply since October last year. Rubber has moved up 30% to from Rs.13,000 per 100 kg to Rs.17,000 per 100 kg. Similarly crude has risen 70% since October from $40 per barrel to $68 per barrel.
The tyre companies failed to meet the analyst expectations due to lower profit margin because of high raw material prices. The analysts have started cutting their target prices on most of the tyre stocks to factor in earning stress.
The tyre companies are mostly dependent on the automobile industry, as we are aware that the automobile industry is also not performing due to the COVID19 Pandemic. In April all major auto companies reported a month-on-month decline in sales.
What should we do ?
Long Term Perspective – With the changing government regulations of scrapping the old vehicles and the BS-VI models coming into the picture, there is a good potential of growth in the tyre manufacturing companies.
Short Term Perspective – There might be a small rise in the share prices of these companies in the coming quarter as monsoons may witness a demand for tyres.
3. Rise in Silver Price
Silver has risen nearly 15% since Thursday when posts began circulating on Reddit urging retail investors to buy silver mining stocks and iShares Silver Trust, an exchange-traded fund (ETF) backed by physical silver bars, in a GameStop-style squeeze.
Buying an ETF can boost silver prices by increasing the number of shares in the fund and making its operator buy more metal to back them
However, analysts have urged investors to be cautious. “In case of silver caution is advised as the recent rally has no fresh triggers and is completely driven by speculation
Silver is typically more volatile than its much more costly sister metal, gold, often posting sharp swings in prices. In addition to its role as a speculative asset and store of value, it has industrial uses, including solar panels. Meanwhile, Bloomberg reported that retail sites were overwhelmed with demand for silver bars and coins, suggesting the Reddit-inspired frenzy that roiled commodities markets last week is spilling over into physical assets.
Should we Invest in Silver ?
Silver prices on MCX had posted gains of 3.2% or ₹2,170 per kg on Friday. Despite the recent gains, silver prices are still down about ₹6,000 from their all-time highs of about ₹80,000 hit in August last year. Investments in silver-dependent greener technologies such as solar panels and electronics are rising around the world along with broad-based dollar weakening that is making silver cheaper for holders of other currencies.
Irrespective of the rise or fall in the precious metals’ prices, one should invest a small percentage of their investment portfolio in gold/silver as a diversification strategy.
IRDAI annual report: LIC’s claim settlement ratio deteriorated in FY20 to 96.6%
LIC saw its claim settlement ratio deteriorate marginally in FY20 to 96.6% from 97.7% in FY19 even as private insurers increased their settlement ratio to 97.18% from 96.6% in this period. Private sector life insurer Max Life had the highest claim settlement ratio for the industry at 99.2% followed by HDFC Life and TATA AIA – with a settlement ratio above 99%. Edelweiss Tokio Life and Sahara Life had among the worst settlement ratios at 83.4% and 89.4% respectively. Private insurer, ICICI Prudential was in the tenth spot with a settlement ratio of 97.8%.
Government plans to sell 20% of its stake in National Fertilizers Ltd through ‘offer for sale’
The GoI intends to disinvest 20 percent paid-up equity capital of NFL out of its shareholding of 74.71%, through the ‘Offer for Sale’ (OFS) method of shares by promoters through the stock exchanges. The Centre is also considering allotting shares to eligible and willing employees of NFL at a discount on the issue or discovered price. Incorporated on August 23, 1974, National Fertilizers is a Mini Ratna company with an authorized capital of ₹1,000 crores and a paid-up capital of ₹490.58 crores out of which the Government of India (GoI) holds 74.71 percent shares and 25.29 percent shares are held by financial institutions and others.
Geotagging of warehouses in works for location tracking
The government is working on geotagging all warehouses, cold storages and refrigerated vans in the country for real-time tracking of the location and status of space availability. The data will be captured in a mobile app, which can be used by the government as well as farmers to locate the nearest warehouses and store their produce, reducing the risk of wastage. As per an estimate, we lose Rs 44,000 crore every year due to harvest rot. Even if there are storage facilities available in the vicinity, farmers don’t know about them. With the mobile app, they will have access to information.
Spat between builders, cement makers ramp up over price hike
The tussle between manufacturers of construction inputs such as cement and steel and builders is intensifying, with both sides trading charges of faulty trade practices. The South India Cement Manufacturers Association (SICMA) alleged that builders were spreading “misinformation” on cement prices to take advantage of the economic recovery and increase real estate prices, which are already at unaffordable levels.
CCI actions on Cement & Steel Industry
The Competition Commission of India had come down heavily on cement companies, many of whom saw their offices being raided in December 2020. In 2016, the CCI had slapped a fine of Rs 6,700 crore on 11 cement makers, including UltraTech, Ramco, ACC and Lafarge. Offices of some of these companies were raised in December 2020, as part of a fresh probe against price cartelization. Steel companies have maintained that domestic prices, despite the hikes, remained lower than international rates. Prices in China, Europe, and the US – the three biggest markets – were higher than those in India.
Five-fold spike in BoI’s Q3 net at Rs 541 cr as NPA provisions dip
Public sector lender Bank of India’s (BOI) net profit rose by 412 percent to Rs 541 crore in the third quarter ended December 2020 (Q3FY21) on a sharp dip in provisions for bad loans. It had posted a net profit of Rs 106 crore in the third quarter ended December 2019 (Q3FY20). The bank’s deposits grew by 0.72 percent to Rs 6,11,879 crore in December 2020 from Rs 5,22,138 crore a year ago. The lender’s Capital Adequacy Ratio stood at 12.51 percent with tier-I of 9.44 percent in December 2020. The bank raised Rs 750 crore Basel-III-compliant AT-1 bonds in January 2021.
Mastercard to allow cardholders to transact in cryptocurrencies
Mastercard has partnered with some of the biggest cryptocurrency firms including Wirex and Bitpay. The company will begin allowing cardholders to transact in certain cryptocurrencies on its network, becoming the latest to embrace digital assets. Mastercard isn’t recommending to start using cryptocurrencies. It is enabling customers, merchants and businesses to move digital value.
Delhivery plans to raise $800 million through IPO
In 2019, Delhivery raised $415 million in a Series F financing round led by SoftBank, which valued the Gurugram-based company at $1.5 billion. It is looking to raise up to $800 million through an initial public offering (IPO) that might value the company at $3.2-4 billion.
Adani Group checks into Mumbai Airport by acquiring 23.5% stake; on way to 74% ownership of MIAL
The Adani Group has formally checked into Mumbai International Airport Ltd. by acquiring a 23.5 %stake in it held by two foreign firms ACSA and Bid Service Division Mauritius Ltd (Bidvest) Rs 1685.2 cr.
Adani Group is going to acquire a 74% stake in MIAL, by getting the right to develop the upcoming Navi Mumbai Airport which includes the entire 50.5%stake of outgoing promoter GVK Group
Adani had taken over the Mangaluru, Lucknow, and Ahmedabad airports and is planning to take over Jaipur, Guwahati, and Thiruvananthapuram airports by this July. It will develop, manage and operate these six airports for the next 50 years. Adani Group will be the biggest private airport operator in India in terms of the number of airports handled. Suggested to keep a check on Adani Port share price.
Tesla buys $1.5 billion in Bitcoin, plans to accept it as payment
To bring in more flexibility to further diversify and maximize return on our cash. Bitcoin will give Tesla liquidity in the cryptocurrency once it starts accepting it for payments.
This has briefly pushed the price of a cryptocurrency by 20%.
Government to include 4-day week ESIC facilities in Final rules
The labour ministry will give flexibility to employers to enable four-days a week of work with a ceiling of 48 hours in a week in the final rules that would be notified soon. However, employers will have to give three days’ of paid leaves to such workers and 12 hours a day of work in such cases will be after the consent of the employee. Currently, employers have to take the consent of the government to reduce the number of workdays in a week which has been fixed at 48 hours for a workweek of six days and eight hours of work each day.
Ministry of Defence, Bharat Electronics Ltd sign a contract worth over Rs.1000 crore to procure morder radio system.
The Armed forces are in need of transition from the single purpose radio of the past to more flexible Software Defined Radios (SDRs) to serve most of their wireless communication needs. These SDRs will be backwards compatible with existing Indian radios. Different Service groups require different form factor radios for specific platforms and waveforms/applications. India’s Ministry of Defence (MoD) and Defence Public Sector Undertaking (DPSU) Bharat Electronics Limited (BEL) have signed a contract for procurement of Software Defined Radio Tactical (SDR-Tac) worth over ₹1,000 crores.
Go Air revives IPO Plans, Wadia Group may dilute 30% stake in the Airline
Go Air is planning to raise Rs 3,000 crore in an IPO and has appointed Citigroup, ICICI Securities, and Morgan Stanley as the bankers. The Wadia Group, which operates businesses including Bombay Burmah, Bombay Dyeing, Britannia, National Peroxide, and Bombay Realty, will likely dilute 30% of its stake in GoAir. The airline operates more than 300 daily flights and has an 8.6% share of domestic passenger traffic. The airline flies to 36 destinations, including 27 domestic cities. The IPO is for a long term raising fund and reduces the debt.
What you can look at in the near future?
The aviation sector in India will witness consolidation in 2021 as the government expects to complete the sale of Air India in FY22 and Jet Airways’ new owners are in the process of re-starting its operations. Meanwhile, the Tata Group invested $37.7 million to buy an additional 32.7% stake in AirAsia India.
It will be worth seeing the kind of response that GoAir will experience. the industry structure is going to be a key theme for investors this year since the potential change in industry structure could lead to a significant change in the competition.