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Category: Financial Market

  • Canara Bank hikes fixed deposit rates by up to 25 basis points

    State-owned Canara Bank on Tuesday raised interest rates on fixed deposits across various maturities by up to 25 basis points.

    The revised rates are effective from March 1, 2022, Canara Bank said in a statement.

    Interest rate on fixed deposits for tenure 1 year has been increased to 5.1 per cent while for one-two years it is raised to 5.15 per cent from 5 per cent, it said.

    Fixed deposit between 2-3 years would invite interest rate of 5.20 per cent and 3-5 years 5.45 per cent from 5.25 per cent earlier, it said.

    Maximum 25 basis point hike has been done for the 5-10 years fixed deposit slab to 5.5 per cent, it added.

    Senior citizens would earn 50 basis point more across all the brackets.

  • Rupee slumps 49 paise to 75.82 against US dollar in early trade

    The rupee declined 49 paise to 75.82 against the US dollar in opening trade on Wednesday amid a weak risk appetite as tensions escalated in Eastern Europe.

    Forex traders said sustained foreign fund outflows, a lackluster trend in domestic equities and elevated crude oil prices weighed on investor sentiment.

    At the interbank foreign exchange, the rupee opened at 75.78 against the US dollar, then slipped further to 75.82, registering a decline of 49 paise from the last close.

    On Monday, the rupee had settled at 75.33 against the US dollar.

    The forex market was closed on Tuesday on account of Mahashivratri.

    “The Rupee opened gap down against the US Dollar this Wednesday, tracking a rebound in the dollar index after ceasefire negotiations between Russian and Ukraine forces failed,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

    Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 percent to 97.41.

    Stronger crude oil prices and weaker Asian currencies against the US Dollar could weigh on sentiments, Iyer said.

    Meanwhile, global oil benchmark Brent crude futures jumped 5.15 percent to USD 110.38 per barrel.

    Markets will continue to remain volatile, and trade will continue surrounding headlines in Eastern Europe. The RBI could be present to curb excess volatility, Iyer added.

    On the domestic equity market front, the 30-share Sensex was trading 748.79 points or 1.33 percent lower at 55,498.49, while the broader NSE Nifty slipped 177.20 points, or 1.06 percent, to 16,616.70.

    Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 3,948.47 crore, as per stock exchange data.

  • ₹34 to ₹142: Small-cap multibagger stock gives 300% return in 2022

    Amid stock market investors are busy finding out possible multibagger stocks for 2022, a good number of small-cap stocks have entered the list of multibagger stocks and multibagger penny stocks in 2022. Shares of Variman Global Enterprises are one of them. This BSE listed IT solution company stock has surged from ₹34.35 (close price on 31st December 2021 on BSE) to ₹141.90 apiece levels today, logging around 300 per cent rise in 2022.

    In last one week, multibagger stock has risen from around ₹124 apiece levels to ₹141.90 levels, logging around 14.50 per cent raise in this period. The small-cap stock has hit upper circuit on 3 out of 5 sessions in this period. In last one month, the small-cap IT stock has risen from around ₹52 to ₹141.90 levels, appreciating around 175 per cent in this period. Similarly, in year-to-date time, the multibagger IT stock has delivered more than 300 per cent return to its shareholders.

    Impact on investment

    Taking cue from Variman Global Enterprises share price history, if an investor had invested ₹1 lakh in this multibagger IT stock one week ago, its ₹1 lakh would have turned to ₹1.14 lakh today. Likewise, if an investor had invested ₹1 lakh in this stock one month ago and had remained invested in this stock till date, its ₹1 lakh would have turned to ₹2.75 lakh today.

    Similarly, if an investor had invested ₹1 lakh in this stock at the end of 2021 buying one stock at around ₹34.50 apiece levels, its ₹1 lakh would have turned to ₹4 lakh today, provided the investor had remained invested in the scrip throughout this period.

    On Tuesday trade session, the multibagger stock climbed to its life-time high of ₹143.55 levels whereas its 52-week low is ₹11.65 apiece. Current market capital of the small-cap stock is ₹237 crore and its book value per share is 9.60. Its current trade volume is 88,457, which is much higher than its 20 days average volume of 62,432.

  • MFs garner Rs 99,704 crore via NFOs in 2021 on sharp rally in stock market

    Mutual fund houses launched 140 new fund offerings (NFOs), which collected about Rs 1 lakh crore in 2021 on a sharp rally in the markets and an exceptional increase in the retail investors’ interest.

    However, the current volatility in the stock market might prompt asset management companies (AMCs) to limit the launch of NFOs this year, said MyWealthGrowth.com co-founder Harshad Chetanwala.

    Ankit Yadav, wealth manager (USA) and director of Market Maestro, also believes that NFOs are going to decrease in 2022 and little will come in 2023 when rates start changing.

    According to data compiled by Morningstar India, there were 140 new fund offers (including closed-end funds and ETFs) in 2021. These managed to garner a respectable Rs 99,704 crores during their inception stage.

    This was way higher than 81 NFOs floated in 2020 and cumulatively, these funds were able to garner Rs 53,703 crore.

    “Given the sharp rally in the markets along with the need to fill product gap created post-recategorisation and giving investors new themes to invest in, asset-management companies launched a plethora of new schemes across the year (2021),” Morningstar noted.

    Usually, NFOs come during a surging market when investor sentiments are high and optimistic. The stock market along with the positive investor sentiments kept surging post-March 2020. It is from this point in time the launch of NFOs started, Chetanwala said.

    The NFOs were floated to capitalise on the mood of investors and attract their investment as they were willing to invest at that time, he added.

    “The main fact as a wealth manager I see in low rate scenario is that the borrowing becomes easy with easy money fluctuating around businesses tend to bring their IPOs and AMC (assets management company) businesses are inclined NFOs,” Market Maestro’s Ankit Yadav said.

    In 2020, the central banks throughout the globes cut the rates and made rates hit all-time lows in the 100-year history. Rates remain unchanged in 2021. That’s why to utilise low rates, AMC businesses bring NFOs, he added.

    The maximum number of funds (25) were launched in the index fund segment, which amassed Rs 4,082 crore, followed by other ETFs (24), which collected Rs 7,482 crore and fixed-term plans (23), which mobilised Rs 5,057 crore.

    In addition, investors were attracted to international funds and sectoral or thematic funds. The AMCs launched 12 sectoral or thematic funds, which raised Rs 13,237 crore and floated 12 overseas funds of funds, which mopped up Rs 6,351 crore.

    Experts believe that the dominance of index funds and ETFs (exchange-traded funds) within NFOs is not surprising, owing to a couple of factors.

    Existing AMCs have no restrictions in the number of passive products they can manufacture, whereas there are limits on other types of funds, Vasanth Kamath, founder and CEO at Smallcase, said.

    “Also, as investors (across retail, HNIs, institutional) are broadening and diversifying their portfolios, they’re preferring to take an index approach to new exposures and asset types, making it both efficient and simple versus having to build their own frameworks and strategies on these universes,” he said.

    In addition, the staggering growth of new demat accounts requires fund houses to offer a larger, diverse line-up of ETFs that were missing in the exchange-traded form factor, he added.

    Another factor for higher NFOs in the index category could be strong performance as the index delivered over 20 per cent last year.

    Further, the penetration of Indian investors towards index or ETF is low. So, AMCs try to capture their market share, Market Maestro’s Yadav said.

  • Over 6.2 crore ITRs, 21 lakh audit reports filed on new e-filing portal

    Over 6.2 crore income tax returns and about 21 lakh tax audit reports have been filed on the new e-filing portal since June last year. The new income tax portal was launched on June 7, 2021.

    “More than 6.2 crore Income Tax Returns (ITRs) and about 21 lakh major Tax Audit Reports (TARs) have been filed on the new e-Filing portal of the Income Tax Department as on 10th February 2022,” the tax department said in a statement.

    Out of the 6.2 crore ITRs filed for AY 2021-22, 48 per cent are ITR-1 (2.97 crore), 9 per cent ITR-2 (56 lakh), 13 per cent ITR-3 (83 lakh), and 27 per cent ITR-4 (1.66 crore), ITR-5 (11.3 lakh), ITR-6 (5.2 lakh) and ITR-7 (1.41 lakh).

    The government had in January extended till March 15 the deadline for corporates to file income tax returns for the fiscal ended March 2021, while the same for filing tax audit report and transfer pricing audit report for 2020-21 fiscal is February 15.

    ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers.

    Sahaj can be filed by an individual having income of up to Rs 50 lakh and who receives income from salary, one house property/other sources (interest etc). ITR-4 can be filed by individuals, HUFs and firms with total income of up to Rs 50 lakh and having income from business and profession. ITR-3 is filed by people having income as profits from business and trusts, respectively.

  • Shares of this realty firm zoomed 165% in 6 weeks, trade at 7-year high

    Shares of D B Realty hit an over seven-year high of Rs 116.70, and was locked at the 5 per cent upper circuit on the BSE on Wednesday, after its board approved raising funds via issuing 50 million convertible warrants to Rekha Jhunjhunwala and others.

    The stock of Mumbai-based real estate company has been locked at the 5 per cent upper circuit for the eight straight trading day. It quoted at its highest level since June 2014. The counter has seen huge trading volumes, with a combined 2.1 million equity shares changing hands. There were pending buy orders for 1.6 million shares on the NSE and BSE.

    In the past six weeks, the stock price of D B Realty has zoomed 165 per cent from Rs 44 on December 29, 2021. In comparison, the S&P BSE Sensex was down 1 per cent during the same period.

    D B Realty in an exchange filing today said, its board approved raising of funds through issue of 50 million warrants convertible into equivalent number of equity shares of the face value of Rs 10 each to non-promoter investors on a preferential basis. This in addition to 77 million warrants that had already approved in board meeting held on February 3, 2022, the company said.

    DB Realty will allot 10 million warrants each to ace investor Rakesh Jhunjhunwala’s wife Rekha Jhunjhunwala and M/s RARE Investments, a partnership firm represented through its partner Rekha Jhunjhunwala.

    Rekha Rakesh Jhunjhunwala held 5 million or 2.06 per cent stake in D B Realty as on December 31, 2021, the shareholding pattern data shows.

    Besides these two, the company will allot 5 million warrants each to Lotus Family Trust represented by its Trustee namely Barclays Wealth Trustees (India) Private Limited and M/s KIFS Dealers, a partnership firm represented through its Partner Khandwala Finstock Private Limited. The company will also allot 10 million warrants each to Abhay Chandak and Aditya Chandak.

    An amount equivalent to at least 25 per cent of the warrant issue price shall be payable at the time of subscription and allotment of each warrant and the balance shall be payable by the warrant holder(s) on the exercise of the warrant(s) at any time within a period of 18 months from the date of allotment, the company said.

    On Friday, February 4, 2022, the Mumbai-based real estate major Godrej Properties said it had decided not to go ahead with the proposed investment in DB Realty. The company said the decision was taken after receiving shareholders’ feedback.

    The day before, Godrej Properties had announced a plan to invest Rs 400 crore for around 10 per cent stake in DB Realty and another Rs 300 crore to set up a joint platform for undertaking slum redevelopment projects. The total size of the joint platform of Godrej Properties and DB Realty would have been Rs 600 crore, with each party contributing Rs 300 crore.

  • Shares of this realty firm zoomed 165% in 6 weeks, trade at 7-year high

    Shares of D B Realty hit an over seven-year high of Rs 116.70, and was locked at the 5 per cent upper circuit on the BSE on Wednesday, after its board approved raising funds via issuing 50 million convertible warrants to Rekha Jhunjhunwala and others.

    The stock of Mumbai-based real estate company has been locked at the 5 per cent upper circuit for the eight straight trading day. It quoted at its highest level since June 2014. The counter has seen huge trading volumes, with a combined 2.1 million equity shares changing hands. There were pending buy orders for 1.6 million shares on the NSE and BSE.

    In the past six weeks, the stock price of D B Realty has zoomed 165 per cent from Rs 44 on December 29, 2021. In comparison, the S&P BSE Sensex was down 1 per cent during the same period.

    D B Realty in an exchange filing today said, its board approved raising of funds through issue of 50 million warrants convertible into equivalent number of equity shares of the face value of Rs 10 each to non-promoter investors on a preferential basis. This in addition to 77 million warrants that had already approved in board meeting held on February 3, 2022, the company said.

    DB Realty will allot 10 million warrants each to ace investor Rakesh Jhunjhunwala’s wife Rekha Jhunjhunwala and M/s RARE Investments, a partnership firm represented through its partner Rekha Jhunjhunwala.

    Rekha Rakesh Jhunjhunwala held 5 million or 2.06 per cent stake in D B Realty as on December 31, 2021, the shareholding pattern data shows.

    Besides these two, the company will allot 5 million warrants each to Lotus Family Trust represented by its Trustee namely Barclays Wealth Trustees (India) Private Limited and M/s KIFS Dealers, a partnership firm represented through its Partner Khandwala Finstock Private Limited. The company will also allot 10 million warrants each to Abhay Chandak and Aditya Chandak.

    An amount equivalent to at least 25 per cent of the warrant issue price shall be payable at the time of subscription and allotment of each warrant and the balance shall be payable by the warrant holder(s) on the exercise of the warrant(s) at any time within a period of 18 months from the date of allotment, the company said.

  • Beat the market in 2022 with focused investment in three sectors

    Unprecedented retail participation and cheap money have come together to push most markets to record highs in 2021. The strength of the mother market, the US, is imparting resilience to other developed markets and emerging markets like India. The exuberant retail participation is a totally new development that has made market prediction extremely complex.

    A couple of data points that throw light on the unprecedented retail exuberance and its impact on markets would help us to get the issue in perspective. In 2021 alone, US investors have downloaded 15 million trading apps and invested $1 trillion in equity. This investment is higher than the cumulative investment made during the last 20 years. Retail investors in the US now own 12 times more stocks than hedge funds. Cheap money has provided a favorable context for investing/ trading in stocks .

    This explosion in retail participation is a global phenomenon triggered by the pandemic. In emerging markets, this trend is conspicuous in India. Retail participation is desirable but the concern is about exuberance and total disregard for valuations.

    An important lesson from stock market history is that a sharp crash is followed, more often than not, by a sharp rebound. Stock market often overreacts: both on the upside and the downside. During the euphoria of a bull market, valuations reach unsustainable levels, leading to a sharp correction. The panic during a crash takes valuation to very low levels, which in turn leads to buying, triggering recovery. This pattern repeats. This has implications for investors.

  • Asia stocks, oil struggle as Omicron worries weigh

    TOKYO (Reuters) – Asian stock markets were generally weaker  in holiday-thinned trading on Monday, as uncertainty over the economic impact of the Omicron coronavirus variant weighed on investor sentiment.

    U.S. airlines have cancelled or delayed thousands of flights over the past three days due to COVID-19-related staff shortages, while several cruise ships had to cancel stops after outbreaks on-board.

    In Asia, China reported its highest daily rise in local COVID-19 cases in 21 months over the weekend as infections more than doubled in the northwestern city of Xian, the country’s latest COVID hot spot.

    Mainland Chinese shares, though, were mixed, with Shanghai’s benchmark sliding 0.37% but an index of blue chips edged 0.05% higher.

    Australia, Hong Kong and Britain are among markets closed Monday for holidays.

    “There is concern over the widening spread of the Omicron variant, which is overall making people cautious about taking stocks higher” in Japan, said a market participant at a Japanese securities firm.

    Wall Street trading resumes later in the global day following a holiday on Friday. U.S. stocks closed at records on Thursday amid signs Omicron may cause a milder level of illness, even as the highly transmissible strain led to a surge in case numbers around the world.

    In the foreign exchange markets, the U.S. dollar continued to languish near the bottom of its range of the past month against a basket of major peers, after hitting a 16-month high in November as Federal Reserve policymakers turned more hawkish.

    Thet flat at 96.116, towards the bottom of the range from 95.544 to the 16-month peak at 96.938 reached on Nov. 24.

    In the crude market, U.S. West Texas Intermediate futures fell 59 cents to $73.20 a barrel. The contract did not trade on Friday because of the U.S. market holiday.

  • Amazon sues financial crime agency in latest twist of Indian battle

    Amazon.com Inc is taking India’s financial crime fighting agency to court, seeking to quash an investigation into one of its 2019 deals, a court filing seen by Reuters shows.India’s Enforcement Directorate (ED) has for months been probing Amazon’s $200 million investment in India’s Future Group for suspected violations of foreign investment laws.

    The investment is at the centre of protracted legal battles, as Amazon has used the terms of that deal – and cited contract breaches by Future – to stall the $3.4 billion sale of the Indian company’s retail assets to a rival.

    In an 816-page filing, seen by Reuters, Amazon calls the investigation a “fishing and roving” inquiry, saying the ED had sought privileged legal advice and opinions from Amazon and other information not connected to the Future Group deal.

    Multiple Amazon executives, including its India head, had been summoned by the ED in recent weeks and the investigation had caused “unnecessary harassment,” the U.S. e-commerce giant said in its filing to the Delhi High Court on Dec. 21.

    “The directions by the ED asking for disclosure of legally privileged documents and litigation privilege information is derogatory of the principles” laid out in Indian constitution, Amazon said in the filing, which is not public.

    “The investigation is a fishing and roving exercise.”

    Amazon and the ED, which does not make details of its investigations public, did not immediately respond to requests for comment. The case will likely be heard on Thursday.

    The filing is the latest twist in the long-running dispute between Amazon and Future. Though India’s antitrust body suspended their 2019 deal last week, saying Amazon had suppressed information when seeking approvals for it, the ED’s probe is independent of that.

    The dispute centres around three commercial agreements signed between Future and Amazon entities, which a Singapore arbitration panel – also hearing the dispute – has said must be read together when reviewing the transaction.

    Future contends conflating the commercial agreements would effectively mean the deal violated Indian law.

    Amazon’s court filing contained a notice from the ED dated Feb. 19 which sought details of its investment in Future, including copies of agreements, bank account details and other related internal communication.

    It also showed the ED is conducting a far wider probe, and had sought details of big vendors on Amazon’s e-commerce website in India, including sales numbers for those that account for more than 5% of total sales on Amazon.in.

    The notice came after a February Reuters investigation which found Amazon helped a small number of sellers prosper on its Indian platform, giving them discounted fees and using them to bypass foreign investment laws.

    Amazon said at the time it was confident it complied with regulations and that it “does not give preferential treatment to any seller on its marketplace.”