Why we are obsessed with money

What a way to exist!

For most of us, practically the whole day all we are thinking is about money and more specifically how to have more money!

As if money was the only thing in life. Unfortunately for most of us, circumstances just do not permit any other thought!

We are running behind money most of the time which is almost akin to have become obsessed with money. Everything that we are doing in life is centred around money.

Unfortunately, this is because we need money for anything and everything that we do. There’s nothing wrong and what are you doing, however the problem is that over time, it becomes a compulsive habit to keep earning more.

That’s where the danger is. The problem is that there is a point where from we chase money as an addiction, we chase money because we like to do so. If we did not chase money we would not know what to chase now because we get out identity from money and the amount of money we have.

Another thing is that right from childhood we are always taught and our minds are conditioned that everything that we are doing is going to be for the sake of earning money.

There is no one who told you that money is just a means, and then there is something greater in life to achieve. Some examples are legacy; building something, charity; to giving something / helping someone, passion; pursuing something and living; simply to enjoy life and your money

We have got addicted to this and how!

There are three reasons for this:

First, we are what we do. It is the human behaviour. I know I should exercise and I don’t. I know I should eat healthy and I don’t. I know I should spend time with my kids and I don’t. I know that, yes, money isn’t going to make me happy and I still keep trying to make money.

We live by the laws of inertia, in a pattern which is hard to break. But we have to break it. For ourselves and for the sake of people and reasons for which we are chasing money.

Secondly, we need signals of progress. Money is a measure of how far you have progressed in life. The more the money you have the more you can make sure your progress. It’s simply the logic of evolution. People need validation of their success. Bigger house, bigger car, branded goods and list goes on.

Thirdly, it’s the easy way out. It’s only human to avoid difficult things. Important things are very difficult to measure.  Have I been a good father or husband? Have I groomed my child well?  Such things take years to measure and we still don’t have answers.

So, should we not be focused on creating money for ourselves?

I’m not saying that. Definitely create. Take care of yourself for sure!! Use it to the maximum to make yourself happy!!! You need a certain amount and beyond that is extra.

The definition of their certain amount is naturally different from one person to another. If that extra is going to happen easily, without stress and without your involvement, then its fine. Basically don’t kill yourself for that extra. Be Smart.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

How the RBI actually helps you

RBI

Most of us in Mumbai, see this huge structure called the Reserve Bank of India and wonder what it really does. It’s also a tourist attraction!! It has so many other offices and again one wonders why they need to have so many offices. I’m going to try and highlight a very interesting part of RBI’s work and how it helps us directly on a day-to-day basis.

The RBI does a review of the monetary policy of the country at frequent intervals during the year. So how does the monetary policy help us investors to take smart decisions?

Monetary policy is a tool by which the RBI decides to raise interest rates or reduce interest rates or keep them steady.

In our country, as we’re an oil importing nation, this decision is very closely linked to Oil. Oil to a large extent contributes to inflation. We all know what happens when inflation keeps rising. We in India unfortunately do not see too much of inflation falling and things becoming cheaper.

Oil is Not Well

So when oil prices rise i.e. we see a rise in crude oil prices almost instantly we can expect rising food prices. This is because there is going to be a rising cost pressure for manufacturing & services. This rise obviously gets passed onto the retail consumers.

When this happens RBI adopts a hawkish stance, tries to pull money out of the system by raising interest rates. Now when interest rates rise no one seems to be interested in borrowing. This immediately puts a brakes on money circulation.  Less money chasing goods decreases the demand for money. This way it controls inflation.

There is yet another tool that the RBI has and that is known as the CRR or the cash reserve ratio.  This ratio in simple words means the amount of cash that the bank must maintain with the RBI as the percentage of the total assets. So when this increases banks are forced to park more with the RBI and this is also a way to control inflation.

On the other hand when things look dull, when there is a recession of sorts, the RBI comes to the rescue and gets into action to kickstart growth in the country. It does this by lowering the interest rates. This we all will understand quite easily because we see a direct benefit of this happening. We see a fall of interest outgo in our EMI’s for the home loan that we are carrying. New loans become cheaper.

Individuals are motivated to go out and make purchases, whether it is for a washing machine or a piece of real estate. Businesses are motivated to go out and borrow to buy more machinery, to expand capacity, to hire more staff and manpower and basically do everything that will add to the growth of business.

Economic growth results as a result of all this. It is also during this time that stock market rises, we see a rally in stock prices and mutual fund NAV’s jumping higher and higher each day. There is prosperity all around.

Critical Role

As you can see that the central bank of the country has a very very important role to play.  If it makes a mistake, things can go really wrong.  Imagine like the USA or Japan if our interest rates were very low; everyone would run to borrow, they would borrow more than they require because it would be cheap and easy to borrow. And that is very individuals would run into what is known as the debt trap, because someday you’ll have to pay back.

Each day the central bank attempts to make sure that everything in our country remains stable and financially there’s nothing that goes wrong dramatically.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

The year of the bond, once again!

We are not talking of James Bond, we are talking of investment bonds.

We are in a situation where the fixed deposit rates are at a general low and there is a lot of discontent among depositors of fixed deposits.

Whenever we see a situation like this, one way or the other, the bond markets come to the rescue. It comes to the rescue of smart depositors, who are agile to move their money from fixed deposits to bond funds.

Let’s understand what is happening and why.

What Exactly is Happening in the Bond Markets?

It is likely that in this year, investors of bond funds will make handsome gains. Bond prices may rise and there may be capital gains. Investors of bond funds not only earn the rate of interest, but also earn capital gains. So that way, they make more than the return they would make on fixed deposits. The returns could be a high single digit or sometimes as high as double digits.

Over three years, this will become practically tax free or the tax would be a very small amount. So, basically, I am thinking that a rally will happen in the bond market. There are three main reasons for this — reduction in government borrowing (which is favourable), recovery of trading losses (which is favourable) and no change in monetary policy (which is neutral).

A word of caution, however, that such bond market investments are also subject to bond-market volatility and should be considered ideally with the help of a financial expert.

Before proceeding further, let us, therefore, quickly explain a bond, bond fund and bond market. We need to do this because few people understand the bond markets and even fewer invest in the bond markets.

Bond is nothing, but a commercial transaction where the borrower is issuing a bond to the lender and the lender will earn a certain rate of interest. When interest rates fall, everyone becomes interested in owning that bond.

As a result, the demand for the bond increases, the price of the bond increases and the bondholder makes capital gains.

A bond fund is a fund where ordinary investors pool in their money and a fund manager buys them a portfolio of bonds.

Moving onto the Reasons For a Rally in Bond Funds…

Now, the fundamental reason for a rally is reduction in interest rates as it stimulates economy and growth.

Firstly, the government is a massive borrower of funds. So a reduction in government borrowing reduces the demand for money in the economy. As a result, prices of bonds rise and this contributes to capital gains for bond holders.

Secondly, the Reserve Bank of India (RBI) recently announced that the commercial banks and RBI, which are the largest lenders to the government, will have another year to offset losses they have incurred on account of buying government bonds in the past. This action will lead to a rise in the price of bonds and this contributes to capital gains for bond holders.

Lastly, on one side due to the rise in oil prices, there is more inflation and thus more money is needed for circulation in the economy. On the other side, many government bonds are maturing, which will provide money supply. So, it is likely that we see a neutralising effect and thus RBI will take no action. This inaction here will support capital gains as explained above. Hence, this year might be a year of good gains for the bond investors.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Five new financial goals for you this summer

I am going to try and explain to you why the summer holidays of April and May are great months to get a lot of things started, financially speaking.

This time period in a way resets the financial clock. You also have the option to hit the reset button on everything you have done so far; financially speaking of course and hope to do better things better than you did last year.

Let’s look at some of the new and unusual things to do in April.

  • Make a learning budget

Learn something about money or anything you like. The best way to make money is to learn something about money. Just like if you wanted to learn cooking you will get into the cooking class. If you wanted to learn swimming you would enrol in the swimming class. If you find learning about money is too daunting task than learn something which is close at to your heart or related to your work. If you learn something new, there’s a possibility that you will use your new ideas to generate new income and in turn that will generate new wealth for you.  So make a budget, enrol somewhere and spend that budget. How about a % of your annual income? Spend it for sure!

  • Plan a unique holiday 

When you’re by yourself and without your mobile phone you will have the opportunity to think! When you have time to think, suddenly good ideas will come to your mind.  You may think this is silly but you can be sure that you will be amazed if your drivers experiment just once. So it might be a good idea to go for a holiday just by yourself. If you find that too intimidating, join a group of strangers. You can combine that with the adventures experience if you like.  Be extra careful if you’re going with your special buddies. Do this only if they are going to be in a position to help you discuss your idea and make it bigger. They must play the role of complimenting your thoughts. So make a schedule to do this holiday and obviously make a budget to make it happen. Think & create new ways of making wealth.

  • Make a prediction and make it happen

Be brave. Let’s aim to grow and multiply net worth by 50% by the time you come to the end of this financial year. This is not a joke and it is easier than you can imagine.  I’m speaking about NETWORTH and I’m not talking about return on investment. If your networth is Rs. 100 today, all I’m saying is that let’s aim to make this a 150 by the end of this year. This networth comprises of all your savings till date. This can be achieved by simply saving aggressively every month for the next twelve months. Just put this into a recurring deposit or liquid fund so you don’t spend it.  We just have to prove to ourselves that this is possible. Where and how we will invest this money will think about that later.

  • Eliminate a negative belief 

I want to give you an exercise here. Write down all your negative beliefs you have about money and wealth. Most people are not able to achieve the desired level of wealth because they think about wealth negatively. So even if you are earning a good amount of income you will never see yourself becoming wealthy. Examples are money causes problems, money causes a fight, managing money is complicated etc. Then for each negative thought, you have written down the positives i.e. the opposite for a few months. Soon negatively biased feelings will evaporate.

  • Make a new investment; something you have not done before

Again here you do not have to be a financial expert. The idea is to learn something new. There are hundreds of investment options. Our objective here is to learn something new. Talk to your advisor and seek his or her guidance. Just a word of caution here; don’t do anything which is speculative or is something that you just can’t understand. Do what do find easy you understand and do that then.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Seeking financial freedom? The time is NOW!

John Lewis famously remarked, “If not now, then when? If not us, then who?” This is so appropriate in the current financial world that we live in.

That statement will leave to rest every other argument that is conservative and against the idea of wealth creation. We are often faced with the situation where there is no option but to create wealth. Read on to know why!

Interest rates are painfully low. For all those diehard fans of guaranteed investment returns, there’s hardly any place to go to. Thinking of fixed deposits? Feeling happy with 7%? And fully taxable? That period is over. Period.

That doctrine of investing into pure fixed deposits and similar instruments is unfortunately standing challenged. There is no option but to sprinkle it with a combination of a little something that will add to the returns earned from fixed income type of securities. In fact this category of investors are in a way, best placed in terms of the current tax laws.

They can earn about 9-10% with minimal or near zero tax over about five years and more. Starting to generate rate of return above the inflation level of 7% is starting to create wealth. So there it is; there is no option but to move in the direction of creating wealth.

For more evolved investors, who invest in equities and who and still sitting on the sidelines tend to run out of patience every now and then. They are sometimes waiting for the right time, sometimes waiting for correction, sometimes waiting for valuation and sometimes waiting for just nothing. Sometimes, just too busy to take action!

I totally understand not wanting to lose hard-earned money. But if the money does not move it will stagnate. That’s the problem with money.

Hit the Ground Running

Inaction and inactivity kills it. Makes it costly to hold. Makes us lose opportunities, sometimes small and sometimes significant. I know of many people including my dad, who just kept investing into equities and holding forever. No doubt they were hugely (big HUGELY) better off then the people in the same time zone. I think they could have done far better with some smart lessons on asset allocation. This is because if they compare the growth rate of their holding over a period of 20 or maybe 30 years the compounded rate of return earned is often not impressive.

It is just marginally better or a few percentage points above the fixed deposit rate. Hence the need for asset allocation, which simply put is not to have all eggs in one basket at any given point in time. These sections of investors anyways create wealth, and, asset allocation is the tool that ensures that the process of wealth creation continues uninterrupted. So again there it is; even for this section there is not option but to start enhancing their wealth creation activities, else returns will continue to remain forever mediocre.

Then there are skeptics and there is nothing much for skeptics of everything, except that they need a serious dose of financial education. Perhaps what if needed is a proof of concept and for that, which better country to live in other than India where financial transparency in investments is so high that I sometimes feel, it comes from another planet.

 Your Money Needs Action

Today, there is a whole lot of variety to choose from and we have never been more spoilt for choice. But the most important thing in all this is to understand that your money needs action. It needs activity and for that the time is now!

And furthermore, if you asked me this question 10 years ago; I would have said that, the Time is NOW. If you ask this question 10 years hence, I will still say the Time is NOW. Any time is the right time to start the process of creating wealth. All that is important is that you take your first step; then continue it all the way with zeal and determination… till you have the level of wealth that you desire. And if you accumulate more than you need, still do it and share it with the world.

If you want your financial freedom; then the Time is NOW!

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager and Financial Freedom Coach.

Young Turks: Here’s the success story of venture fund Aspada

Venture fund Aspada was co-founded by Kartik Srivatsa and Thomas Hyland in 2012 and has made 17 investments so far across Fin-tech, agriculture, health and edu-tech startups.

Young Turks takes a look at their investment thesis, their differentiated VC model and meet three of their portfolio companies – Capital Float that underwrites unsecured loans to startups and SMEs; Dunzo, a hyper local concierge and delivery player that is also Google’s first direct startup investment in India; WayCool, a Chennai-based agriculture-tech startup.

HMVL to pick around 11% stake in ReviewAdda

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Hindustan Media Ventures Ltd (HMVL) on Tuesday said its board has approved investing up to Rs 6 crore in a digital platform for college admissions ReviewAdda to pick a 10.71 percent stake. Under the proposed investment, basis the existing capital structure of ReviewAdda, the company will acquire either equity shares or convertible equity-linked instruments which can be converted into equity shares equivalent to 10.71 percent equity stake in ReviewAdda, HMVL said in a regulatory filing.

”The board of directors of Hindustan Media Ventures… approved the proposal to invest up to Rs 6 crore in equity shares and/or convertible equity-linked instruments of ReviewAdda,” it stated.

ReviewAdda owns and operates www.reviewadda.com which helps admission seekers in selecting and applying to various colleges and universities. HMVL on Monday reported a 77.8 percent decline in its consolidated net profit to Rs 4.41 crore for the second quarter ended September.

The company had posted a net profit of Rs 19.86 crore in the July-September quarter a year ago, it said. Its revenue from operations was down 31.92 percent to Rs 131.21 crore during the period under review, against Rs 192.74 crore in the corresponding period of the previous financial year, the company said.

Bihar Election October 27 Highlights: Nitish Kumar, Chirag Paswan to address rallies today

Campaigning for the 71 seats of Bihar that will go to polls on Wednesday under the first phase of the assembly election came to an end on Monday. While the campaign for the other phases is in full swing. The three-phase polls will be held on October 28, November 3 and November 7 and the counting of votes will take place on November 10. CM Nitish Kumar, Chirag Paswan and BJP leaders JP Nadda and Smriti Irani will address various rallies today.

Here are the highlights of the developments in the poll-bound state:

 

  • Voting to 71 Seats Tomorrow: 71 constituencies in six districts will go to vote tomorrow including Gaya, Rohtas and Aurangabad. Among parties while RJD is contesting on 42 of the 71 seats in the first phase, JD(U) candidates are in 41 constituencies, BJP (29), Congress (21) and LJP nominees are in fray at 41 places.

 

  • Nityanand Rai, MoS Home on Tejashwi Yadav: They never met people of Bihar at their residence, let alone them offering a glass of water to anyone. There’s no question of RJD forming govt as NDA will form the government with a two-third majority and Nitish Kumar will become Bihar CM.

 

  • Congress President Sonia Gandhi: High on power and its ego, the current Bihar govt has deviated from its path. Neither their saying nor doing is good. Laborers are helpless, farmers are anxious and youth are disappointed. The public is with Congress Mahagatbandhan and it is the call of Bihar.

 

  • Rahul Gandhi to Address Rallies Tomorrow: Congress leader Rahul Gandhi will address two public election meetings on October 28.

Gold rate today: Yellow metal rises above Rs 51,000/10 gms; resistance placed at Rs 51,250 level

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Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Tuesday following gains in international spot prices on a weak US dollar and as rising COVID-19 cases globally dampened investors’ risk appetite, analysts said.

At 11:50 am, gold futures for December delivery rose 0.23 percent to Rs 51,046 per 10 grams as against the previous close of Rs 50,930 and opening price of Rs 51,065 on the MCX. Silver futures traded 0.84 percent higher at Rs 62,424 per kg. The prices opened at Rs 62,341 as compared to the previous close of Rs 61,906 per kg.

“Gold prices are stuck in a range. Rising COVID-19 cases is supporting the yellow metal prices. However, it is unlikely to show a major upmove. Investors can sell gold on a rally for today,” said Amit Sajeja, AVP Research – Commodities & Currencies, Motilal Oswal.

Also supporting gold, the US dollar dipped 0.1 percent against a basket of currencies and weakness in equity markets globally.

International gold prices rose on Tuesday after a fresh wave of coronavirus infections raised concerns over a global economic recovery and bolstered the precious metal’s safe-haven appeal, Reuters reported.

Spot gold gained 0.3 percent to $1,908.02 per ounce. US gold futures were up 0.3 percent at $1,911.20.

“On MCX, resistance for gold is placed at Rs 51,250 level while support is seen at Rs 50,700. Silver may face resistance Rs 62,900 level and support at Rs 61,400 level,” Sajeja added.

(Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.)

US Elections 2020: Joe Biden says not doing many rallies to prevent spread of coronavirus

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Democratic presidential candidate Joe Biden has justified his decision not to hold public rallies and restrict his travel, arguing that he does not want to be a COVID-19 super spreader. The US had more than 481,372 new cases of COVID-19 last week, setting a record for the most new infections reported in a week since the pandemic began.

Nearly half the country set records for new COVID-19 cases in a week while five states had a record number of deaths in a week: Montana, North Carolina, South Dakota, Wisconsin and Wyoming.

The US reports a new COVID-19 case every 1.26 seconds, according to a USA Today analysis of Johns Hopkins University data. Worldwide, there have been more than 43 million coronavirus infections. ”The big difference between us – and reason why it looks like we’re not traveling -we’re not putting on super spreaders. We are doing what we’re doing here,” Biden, 77, told reporters in his home State of Delaware on Monday.

”Everybody’s wearing a mask and trying as best we can to be socially distanced. And that’s what we’re doing. You’ve attended a number of our press conferences as well. It’s important to be responsible,” Biden said. The former vice president, who is leading in national polls against his Republican rival incumbent President Donald Trump, exuded confidence of winning the November 3 election.

”You know me. I am not overconfident about anything. I just wanna make sure we can earn every vote possible. That’s why we’re here. And you know that- that blue wall has to be re-established. With the grace of God and the goodwill of the neighbours, I’m gonna win Pennsylvania. It’s a matter of a great deal to me personally as well as politically, he said. ”I think we’re gonna win Michigan. I think we’re gonna win Wisconsin. I think we’re gonna win Minnesota. I think we have a fighting chance in Ohio. I think we have a fighting chance in North Carolina. We have a fighting chance in Georgia. A fighting chance in Iowa. So fortunately because of over six million individual voters average contributors – average contribution USD 49 we’re able to compete. Like we haven’t been able to compete before in all these different states,” he said.

Biden said he will travel to Iowa, Wisconsin, Georgia, Florida and maybe other places as well. ”There’s a lot we’ve been doing as well in terms of being online and social ..everything from fundraising efforts to making sure we meet. I met today with a group of leaders in the Democratic Party laying out where we’re gonna go. Getting their input and the like, he asserted.

Biden slammed Trump for his alleged failure to control coronavirus. ”The bottom line is Donald Trump is the worst possible president, the worst possible person to try to lead us through this pandemic. He either doesn’t have any idea what to do or he just doesn’t care. On Friday, Dr. Tony Fauci, the nation’s most respected infectious disease expert, publicly acknowledged that the president has not even met with his COVID-19 team for months,” he said.

On Monday evening, his campaign announced that Biden would be travelling to the battleground state of Michigan later this week to ”discuss bringing Americans together to address the crises facing the country.” Trump had won the 2016 elections in Michigan by just 10,000 votes, the lowest in presidential elections.

Also Read: US Presidential Elections 2020 – Will the Indian-American samosa caucus be re-elected?

Both Trump and his vice president Mike Pence are campaigning in Michigan this week. Biden’s running mate Kamala Harris was in Michigan over the weekend. Jill Biden is also planning to campaign in Michigan on behalf of her husband this week.

RBI notifies government’s interest waiver scheme

RBI

The Reserve Bank of India (RBI) has notified the government’s scheme of interest waiver during the moratorium period and has asked all lending institutions to take necessary action within the stipulated timeline.

In a release, the RBI said, “the Government of India has announced the Scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020) on October 23, 2020, which mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020, to August 31, 2020, by respective lending institutions.”

It was earlier reported that the Cabinet committee on economic affairs had discussed and agreed on a proposal for an ex-gratia payment of ‘interest on interest’ charged on loans for the six-month moratorium period announced in the wake of the COVID-19 pandemic.

According to the scheme, the government will pay the difference between compound interest and simple interest. The ex-gratia payment of ‘interest on interest’ will be applicable for six months and only for selective specified loans.

The central government had submitted an affidavit in the Supreme Court earlier this month which supported the waiver of compound interest for loans under a moratorium for certain categories. The Supreme Court on October 14 had asked the government to implement the decision soon.

Positive on banks, NBFCs; safe to own HDFC Bank & Kotak: Dipan Mehta

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HDFC Bank and Kotak Mahindra Bank are the safe stocks to own, said Dipan Mehta, Director at Elixir Equities in an interview with CNBC-TV18.

“They are secular growth stories and if you want safety with growth then HDFC Bank and Kotak Mahindra Bank are a must have in your portfolio,” he added.

According to him, reports of Kotak Mahindra Bank and IndusInd Bank deal were a complete rumour. “A few weeks ago, Hinduja Group said that they wanted to increase the stake in IndusInd Bank. So I don’t think that when you have such strong promoter in IndusInd Bank they would like to dilute their holdings and get merged with Kotak and to an extent lose their identity,” he said.

“One shouldn’t bet specifically on this event taking place. On the whole if you have slightly more risk appetite then IndusInd Bank may tend to outperform over the next six-twelve months the entire banking index,” he added.

Mehta is positive on the banking and non-banking financial companies (NBFCs) sector as a whole. He feels they may regain the leadership position in next year.

Dipan believes one needs to be a bit cautious on Reliance Industries Ltd (RIL). “No doubt, great company and certainly fantastic long-term prospects given the kind of efforts that have been done on setting up new businesses but you could have a soft patch in RIL and a fair bit of underperformance,” he said.

(Disclosures: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)

Expect a significant sequential improvement in Indian market: Mark Matthews of Bank Julius Baer

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In an interview to CNBC-TV18, Mark Matthews of Bank Julius Baer & Co and Simon Powell, Global Head of Thematic Research at Jefferies, discussed at length the COVID-19 situation around the globe, India and emerging markets.

Matthews said that the Indian market is “surprisingly robust”. He expects to see a significant sequential improvement in the Indian market.

However, his top pick among the emerging markets is China. “We don’t dislike the Indian market. It’s not our major ‘overweight’ within the emerging markets either – that’s China,” said Matthews.

According to him, China may grow by 2 percent in 2020, 8 percent in 2021 and 5 percent in 2022.

Powell believes markets should be focused on death rate than rise in daily cases. He noted the death rates have been declining across the globe.

On India, he said the chance of another lockdown are slim. According to him, India may outperform other emerging economies.

On the US market, he said, “The US market is not worried about election but waiting for stimulus post-election.”

For more, watch the video

In Bezos vs Ambani battle, focus on disclosures by Amazon

In the Jeff Bezos vs Mukesh Ambani battle royale for the Indian retail market, which is now also evolving into a ‘videshi vs swadeshi’ battle, questions are being raised by corporate watchers.

Eight absolutely unknown facts are emerging in the Bezos vs Ambani battle.

1. Has Amazon’s Jeff Bezos disclosed all of the Amazon-Future agreements to Future Retail Ltd (FRL) shareholders?

To this, corporate watchers say no. Bezos has invested 49 percent in Future Coupons Ltd (FCL), a promoter company of FRL. 51 percent of FCL is held by Kishore Biyani, an Indian resident. FCL, in turn, has 9.82 percent holding in FRL.

It looks as though that FCL is controlled by Biyani with his holding of 51 per cent. This is a requirement under India’s FDI Regulations.

Bezos cannot hold directly even one share in FRL. On the face of it, he seems to be in compliance with FDI Regulations. But, the reality is different.

In a two-tier structure, Bezos has taken control of FRL, which is prohibited under FDI Regulations:

(i) Tier 1 is a shareholders’ agreement between FRL, FCL and other promoters of FRL – in terms of this agreement, without FCL’s consent, FRL cannot transfer its assets or business to any third party and its board cannot even consider such a proposal.

(ii) Tier 2 is a shareholders’ agreement between FCL, Amazon and other promoters of FRL – in terms of this agreement, Bezos has taken over the rights of FCL under the FRL shareholders’ agreement.

(iii) Thus, effectively Bezos controls FRL.

The Future Retail shareholders agreement and the Future Coupons shareholders agreement have never been disclosed to any Indian regulator.

If they are disclosed:

(i) SEBI will find that Bezos has taken control of FRL and will mandate him to make an open offer at a price of Rs 500 per share.

(ii) ED will find that Bezos has invested in and taken control of a multi-brand retail company without Government approval and hoodwinked the Government of India.

Also Read: Amazon says interim stay on Future-RIL deal by Singapore arbitrator; Future says order should be tested under Indian law

2. Has FRL amended its Articles?

Amazon’s rights in FCL were carried as part of the amendment to the Articles of FCL.

FRL Articles have not been amended. This is because, had the amendment been proposed to the shareholders disclosing that Amazon will exercise the rights of FCL under FRL shareholders’ agreement, the public shareholders would have never approved it.

3. Amazon could not have invested in FRL through FDI route under FDI Policy. Then, how does it have enforceable rights against FRL?

For this, Amazon has gone through the above mired (and convoluted) structure;

FRL is engaged in Multi Brand Retail Trade (MBRT); Foreign Direct Investment (FDI) – up to 51 percent – in MBRT is allowed only with prior permission of the government, which will also be subject to veracious conditions, including sourcing of materials within India and management control etc.;

Amazon wants to control multi brand retail space, but without any of the legal hassles; therefore, in a convoluted manner, it went ahead with the mired illegal structure; if the veil is pierced and the transaction structure is studied in detail, it will be found illegal, corporate watchers said.

The fact that Amazon has obtained an interim order from the Emergency Arbitrator injuncting the public company, FRL not to proceed with the scheme, inspite of not having any direct shareholding in FRL, shows that the contractual rights are nothing but “control”, in violation of SEBI and FDI Regulations.

Bezos is learnt to have followed a similar investment structure while investing in More Retail; where he invested Rs 4,200 crore;

For FDI violations, the consequence is, apart from annulment of transactions, Bezos is exposed to penalty of up to three times the investment – ~Rs 5,630 crore x 3 times = Rs 16,890 crore, sources said.

For violation of SEBI Takeover Regulations, apart from penalty, they may also be liable to be prosecuted.

4. How as a foreign company Amazon asserted control over FRL and its Board? And on FRL shareholders?

The assertion shows that Amazon has violated FDI and SEBI Regulations. If Amazon asserts control, it needs to make an open offer.

5. Amazon is asserting control over FRL. Does it violate FDI policy?

Yes.

6. Have all of the agreements been disclosed to regulators – SEBI, ED, etc.?

No – details of transaction selectively provided – in an obfuscated manner

Enforcement Directorate, SEBI, Ministry of Company Affairs, and other authorities etc, must direct Amazon to disclose the agreements and details of actual arrangements in and commence inquiry.

7. What is the crux of the SIAC’d Interim Order?

It records that Amazon’s entire investment was for its direct interests in FRL.

8. Is Mukesh Ambani a competitor of Bezos?

Bezos cannot carry on multi brand retail in India. He can carry on only market-place e-commerce in India. Yet, his Amazon is referring to Ambani’s Reliance as its competitor. Reliance can be Amazon’s competitor only if the latter is permitted to do MBRT.

Paytm Money launches ETFs to help new investors diversify and improve returns on their portfolio

Paytm

India’s homegrown digital financial services platform Paytm today announced that its wholly-owned subsidiary ‘Paytm Money’ has launched Exchange-Traded Funds (ETFs) on its platform, post-approval from the Securities and Exchange Board of India (Sebi). These are passive funds that are listed on NSE /BSE and traded like regular equity shares proving the merits of mutual funds along with the return potential of stocks.

Paytm Money says that it believes that ETF is an essential part of an investor’s portfolio and all Indians must invest in it. Therefore, the company has made it convenient for new investors by facilitating ETF investments for as low as Rs 16 in Equity, Rs 44 in Gold and Rs 120 for NIFTY.

The platform’s interactive and easy to use interface helps to track the price changes in the preferred ETFs along with the flexibility to set a price alert. It also updates the live prices of an ETF and empowers investors to place a sell order during the open market hours and receive the money directly in their bank account. Advanced investors can even execute intra day trades in ETF and the simple stop loss/target price orders allow users to automate their risk management.

The app is also tailored to serve as a good long term strategy helping experienced investors diversify their portfolio on a broad-based level.

Varun Sridhar, CEO – Paytm Money said, “ETFs are investment avenues that everyone should add to their portfolio to earn index or market-linked returns at a lesser cost. At Paytm Money, our efforts have been to democratize and simplify wealth management for all and in the case of ETFs also we have simplified investing for everyone. We are offering a user-friendly interface along with necessary factors that the user may need to make an informed decision and invest in ETFs of their choice conveniently. We are targeting 100k users to invest in ETFs in the next 12 to 18 months through the platform.”

In India, there are 69 different kinds of ETFs available across the index, gold, equity and debt categories with top-performing ETFs such as Aditya Birla Sun Life Gold ETF, Nippon India Nv20 ETF, LIC G-Sec Long Term ETF among others. They have delivered returns to the tune of 18.67, 10.29 and 8.43 percent.

Asian shares hit by surging coronavirus cases, US stimulus woes

Asian stocks markets fell on Tuesday as soaring global coronavirus cases and slow progress on a US stimulus deal hammered investor sentiment and took a toll on Wall Street.  MSCI’s gauge of Asia Pacific stocks outside Japan was down 0.43 percent, with Australia’s ASX 200 off 1.1 percent to an almost three-week low.

China’s CSI300 Index edged down 0.1 percent, as investors looked out for any news from a meeting of China’s Communist Party leaders to set the next five-year plan. Data out earlier in the day also showed China’s industrial profits grew at a slower pace in September, suggesting a recovery in the manufacturing sector is yet to be bedded-in.

In Japan, the benchmark Nikkei 225 dropped 0.28 percent in morning trade while Hong Kong’s Hang Seng index was down 1.02 percent. US indices fell sharply overnight to open the week’s trading, as anxiety over new record daily COVID-19 cases in the United States, Russia and France weighed on investor appetite.

Adding to the gloom, White House economic adviser Larry Kudlow told reporters on Monday that talks over a coronavirus relief package have slowed, though House Speaker Nancy Pelosi remained hopeful an agreement can be reached before the Nov. 3 elections.

Many Senate Republicans have resisted legislation of a scope that Pelosi and Mnuchin have discussed, totaling around USD 2 trillion. ”The challenge for markets is that in most cases they are already pricing a very strong economic bounce. The new outbreaks, and the potential for a double-dip recession, directly contradict this assumption,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

National polls give Democrat Joe Biden a solid lead over President Donald Trump but the contest is much tighter in battleground states that could decide the outcome.

The sharp stock market decline set a bleak tone ahead of a busy third-quarter earnings season, with large US tech firms like Apple Inc, Amazon.com Inc and Google-parent Alphabet Inc set to report. Microsoft Corp reports its results Tuesday.

The Dow Jones Industrial Average fell 2.29 percent overnight, the S&P 500 lost 1.86 percent, while the Nasdaq Composite dropped 1.64 percent.
The dollar was holding largely steady, moving just a touch lower to trade at 92.951 against a basket of six major currencies.uch of the trading in currency markets, as well as other asset markets, was buffeted by the renewed coronavirus fears.

In early Asia, oil prices managed to staunch an extended sell-off though the outlook was weak due to the virus-induced worries over demand. Brent crude was up 12 cents, or 0.3 percent, at USD 40.58 a barrel by 0039 GMT, having dropped more than 3 percent overnight. US oil was up 13 cents, or 03 percent, at USD 38.69 a barrel, after also declining more than 3 percent on Monday. The safe-haven Spot gold added 0.3 percent to USD 1,907.41 an ounce Tuesday morning.