Apple bites to set a record of $2 trillion

 Apple Inc for the first time ever made Wall Street history on Wednesday when its 2020 stock surge pushed the market value past $2 trillion, it is the first time a US company has surpassed that level.

Shares of the iPhone maker rose as much as 1.4% to $468.7 in midday trading. The stock has more than doubled off a March low, in a rally that has been driven by strong earnings results and optimism over its upcoming 5G iPhone

New age DEBT on CREDIT CARDS

 While the real essence of DEBT has remained the same, its applicability has changed over the years.

Earlier people would borrow money for bigger needs such as house, after due consideration. Low Debts could also be credited to the difficulty of getting loan. Today you borrow money for even small wants such as an earphone. The easy availability of credit is alluring.

However, the seemingly helpful loan come with hidden cost. Here's what you don't realize

• You will keep paying interest on the interest that gets added to your outstanding credit card amount. If you dont clear your dues, you can end up by paying between 36-42% interest in a year.
• Once you enjoy the credit facility, you will not shy away from living on credit, which is one of the initial signs of entering the DEBT TRAP.
• Multiple credits not only affect your credit score but also make repayment difficult. Missed payments attract additional interest or penalties which will only push you further into DEBT TRAP.
• Defaulting on credit card payments also attract 18% GST on the sum accrued interest and charges.

New CEO VEDANTA

 Vedanta Ltd on Friday announced that industry veteran and former CEO of Hindustan Zinc Ltd SUNIL DUGGAL has been elevated as chief executive officer of the company. 

Sunil takes over as CEO at a time when Vedanta is gearing up for the next phase of growth with full commitment to the nation's call for 'Atmanirbhar Bharat'. Over 50 percent of our country's imports are in the natural resources and we are striving to raise domestic production to substitute imports.

Commenting on his appointment, Sunil Duggal said, "Vedanta is a purpose driven company and it plays an important role in the economic progress of our country. I am committed to passionately lead the company with a higher purpose & to make sure both our company & communities prosper to make India self-sufficient."

- Equitybulls

Apple overtakes the Saudi Aramco

Apple Inc shares surged to a record high of 7.1% on Friday after reporting a bumper quarterly results, helping the iPhone maker overtake the

Saudi Aramco to become the world’s largest public company. Shares of the company rose to a record high of $412 in early trading.

Closing at that level will give it a market capitalization of $1.786 trillion. Saudi Aramco, which has been the largest public company since going public last year, had a market capitalization of $1.76 trillion as of last close.

RIL acquires a majority stake in Fynd

Mukesh Ambani- led RIL's seventh major acquisition this year - FYND, a startup backed by investors like Google, for Rs295 crore in its push for online-to-offline (O2O) commerce.

The deal being, routed through Reliance Industrial Investments and Holdings, will give RIL an option of investing another Rs100crore in the Mumbai based startup and it will own 87.6% stake. It will give an exit option to Fund's investors. All the founders are from IIT-Bombay.

Morning Outlook

Indian markets could open higher on Monday continuing from Monday’s sharp upmove. Asian markets are mixed with some of them at 4 month lows impacted by the latest escalation of trade war between US and China involving Huawei. US markets ended lower on Monday, with Nasdaq falling even more as tech shares took the brunt of selling pressure due to Trump’s ban on exports by US companies to Huawei which may hit a lot of US tech companies.

Indian markets could open higher and later consolidate with focus on corporate results and global developments. Defensive stocks could underperform while cyclical sectors including financials, Oil & gas, Realty and Capital goods likely to do well. On upside, Nifty could face resistance at 11857 while 11763 remains a crucial support. Among stocks under coverage, SBI, Titan, Kotak Bank, Heidelberg, Shree Cements, SRF, UPL, ICICI Bank, Axis Bank, GE Power, Ultratech could do well.

Beginner's guide: some terms to know

• Diversified: Schemes that invest in companies across all industry sectors.
• Index: Schemes in which the portfolios are constructed to mirror a specific market index. Securities are purchased in the same proportions as in the selected Index. Index funds are expected to provide a rate of return over time that will approximate or match that of the underlying index.
• Tax Planning/ ELSS: Some mutual fund schemes offer tax benefit u/s 80C wherein investments upto 1.5 lakh a year can be claimed as deduction. These schemes come with three year lock - in and under the new regulation, any new tax planning mutual fund scheme will have to be a 10 year close ended scheme.
• Hybrid : Equity-oriented: Hybrid funds are those which invest in more than one asset class, such as only equity or only debt.
• Debt-oriented: These hybrid funds invest a large part of their corpus in debt instruments and a smaller part in equities.
• NAV: Net asset value is the investment value of each unit of a scheme net of all fund management and administration related expenses.
• Entry Load: Fees an investor has to pay while purchasing units of a scheme.
• Exit Load: Fees an investor has to pay to exit the scheme.

Credit Policy review

The Monetary Policy Committee (MPC) today voted 4-2 in favour of cutting the policy repo rate by 25bps to 6.00%. Further, 5 members voted in favour of maintaining the policy stance at “neutral”, while one voted for changing it to “accommodative”. The reverse repo rate now stands at 5.75% and the cash reserve ratio (CRR) remains unchanged at 4.0%.

In other measures, RBI decided to permit banks an additional carve out of 2% of their Net demand and Term Liabilities (NDTL) from Statutory Liquidity Ratio (SLR) holdings, in a phased manner over one year, for the purpose of computing their Liquidity coverage ratio (LCR).

RBI lowered its inflation projections to 2.4% for Q4 FY19 (from 2.8% earlier), 2.9-3.0% in H1FY20 and 3.5-3.8% in H2 FY20 (from 3.2-3.4% in H1FY20 and 3.9% in Q3 FY20) with risks broadly balanced. According to RBI, assuming normal monsoon, headline inflation is expected to remain soft in the near term primarily on account of (1) weak food inflation, (2) fall in household inflation expectations and (3) moderating impact of lower than expected core inflation. Further, oil prices have inched up recently but outlook is uncertain due to production cuts by OPEC partly negated by concerns over global demand.

RBI also revised down the growth outlook to 7.2% for FY 20 with 6.8-7.1% in H1FY20 and 7.3-7.4% in H2 FY20 (as against earlier estimate of 7.2-7.4% in H1 and 7.5% in Q3 FY20). RBI acknowledged that economic activity in domestic economy is moderating and growth is facing resistance, particularly due to global growth concerns. Further, volatility in global financial markets, trade tensions and geopolitical uncertainties could adversely impact growth prospects.

As per RBI, investment activity is recovering but is supported mainly by government push on roads and affordable housing. Private consumption is stable and likely to strengthen due to focus on public spending in rural areas and tax benefits announced in budget. RBI acknowledged the need to improve private sector investment activity, which has been lagging. Against this backdrop, the MPC decided to reduce the policy repo rate by 25 bps while maintaining the stance of monetary policy at neutral.

Conclusion and Outlook

The MPC’s decision to reduce policy rate by 25bps was in line with market expectations. Given the near term inflation outlook remains benign and growth is moderating, it could provide some space for further policy easing. However, any future action by RBI is likely to be data dependent and we maintain that this rate cut cycle is likely to be a shallow one, in our opinion.

By further increasing the carve out from mandated SLR for the purpose of LCR calculations by 2%, RBI has improved banks’ flexibility to provide credit. However, on the flip side, demand for the dated Gsec will be adversely impacted as it further increases the already excess SLR holdings of banks, especially PSU banks.

Large increase in gross market borrowings in FY20 over FY19 along with low demand for government bonds due to excess SLR in the banking system could put upward pressure on yields. Even though the near term inflation outlook remains benign due to low food prices and range bound oil prices, we prefer to maintain a cautious stance. This is due to a modest uptick in growth expected in FY20, credit growth outpacing deposit growth and likely fiscal pressures.

In view of the above, the short to medium end of the yield curve continues to offer better risk adjusted returns than the long end. Hence, we continue to recommend investment in short to medium duration debt funds.