Digital payments will help lower fiscal deficit....!

Jaitely with the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency. 

Finance Minister Arun Jaitley today expressed hope that demonetisation will help increase government revenue and lower fiscal deficit, leading to higher expenditure on defence and rural infrastructure. With the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency, he said at the launch government of Digi Dhan Mela here. He illustrated this point by saying that shifting towards less cash economy will help bridge fiscal deficit and bring about improvement in rural India. The will pass on lesser burden to the posterity if the fiscal deficit is lower, he added. At the same time, it will augment capability of administration, increase defence expenditure and improve spending on the poor. The government aims to bring down fiscal deficit to 3.99 per cent of GDP this fiscal. Anonymity of money is gone with demonetisation as the money has come into the banking framework and becomes part of the formal system leading to strengthening of banking, he said. The banks, in turn, can extend more loans and help build a better economy, Jaitley added. Earlier in the day, Prime Minister Narendra Modi unveiled two schemes -- Lucky Grahak Yojana and Digi Dhan Vyapaar Yojana -- for customers and traders alike to promote mobile banking and e-payments. A total of 15,000 people will get rewards as Christmas gift through a draw, whereby each of them will have Rs 1,000 in their accounts. "Starting today, this scheme will continue for the next 100 days. Everyday, 15,000 people are going to receive rewards of Rs 1,000 each. In the next 100 days, lakhs of families are going to receive crores of rupees as gift, but you will be entitled to this gift only if you make use of mobile banking, e-banking, RuPay card, UPI, USSD - such means and methods of digital payment," Modi said. In addition, there will be a grand draw once every week for such customers in which the prize money will be in lakhs of rupees. On April 14, on the occasion of birth anniversary of Dr Baba Saheb  Ambedkar, there will be a mega bumper draw where rewards will be in crores of rupees.

Debt funds you should buy for stable gains in 2017

 If you are looking to park your money in fixed income for gains in 2017, you can consider investing in long-duration debt funds which are likely to benefit from falling interest rates. Investment analysts and advisors feel long-duration bond funds could show good returns in the coming months, with the Reserve Bank of India likely to signal softer interest rates. “Falling rate favour long-duration bond funds since they enjoy higher price changes for smaller changes in interest rates. On the other hand, funds in the shorter end of the curve will be affected less by rate changes. The only catch for long term investors investing in long term bonds is that they have to reinvest forthcoming coupons at lower rates which results in lower YTM,” Vijayananda Prabhu, Investment Analyst, Geojit BNP Paribas, told Moneycontrol. In the previous review of the Monetary Policy on December 7, RBI Governor Urjit Patel had kept repo rate unchanged at 6.25 percent while stating the central bank was “retaining an accommodative policy stance.” Manoj Nagpal, CEO of Outlook Asia Capital, also favours long-duration bond funds along with dynamic bond funds. “Higher liquidity in the banking system will remain longer than expected and credit offtake is likely to be sluggish in the next 12 months. Hence, banks will continue to reduce interest rates on deposits and the re-investment risk increases during the next 12-18 months.

 At the same time, the current pause in cut in interest rates continues to provide investors with a suitable time to invest in long-duration debt funds and dynamic bond funds,” he said. Dynamic Bond Funds invest in the debt market when the fund manager thinks it appropriate. The fund manager would buy and sell debt instruments as per market movements and the interest rate outlook. Prabhu advises holding a mix of duration and accrual funds. “We have been recommending our debt fund investors to have a balanced portfolio of Accrual and Duration funds in their portfolios to protect downside from any surprises. A fine mix of Duration and Accrual funds will help in generating optimal returns,” he said. He suggests a 3-year holding period for bond portfolios. “Since easier interest rates are inevitable in the long run, one could adopt a 60-40 Duration-Accrual strategy to benefit from current corporate yields and future rate cuts. These portfolios could be held for a 3-years horizon till rates bottom down and redemption turns tax efficient,” he says. The focus of Accrual Funds is earning interest income from debt investment while duration funds look for capital appreciation as well in a falling interest rate scenario

How India lobbied Moody's for ratings upgrade, but failed....!

India criticised Moody's rating methods and pushed aggressively for an upgrade, documents reviewed by Reuters show, but the U.S based agency declined to budge citing concerns over th country's debt levels and fragile banks.

India criticised Moody's rating methods and pushed aggressively for an upgrade, documents reviwed by reviewed by reuters show, but the US based agency declined to budge citing concerns over the country's debt levels and fragile bank.

Winning a better credit rating on Idia's sovereign debt would have been a much needed endorsement of Prime Minister Narendra Modi's economic stewardship, helping to attract foreign investment and accelerate growth.    

Since storming to power in 2014, Modi has unvelied measure to boost investment, Cool inflation and narrow the fiscal and current account deficits, but his policies have not been rewarded with a ratings upgrade from any of the "big three global ratings agencies, who say more is needed.

Previously unpublished correspondence between India's finance ministry and Moody's shows New Delhi failed to assuge the ratings agency's concerns about the cost of its debt. billions in bad loans.

        

Sensex ends flat, Nifty at 8,551 as investors decode GST Bill; Tata Steel top gainer

The S&P BSE Sensex on Thursday ended flat after jumping over 200 points in the early trade, the broader Nifty50 also pared gains to settle the day just a tad above 8,550-mark.
The headline indices welcomed the long-awaited passage of the goods and services tax (GST), though gains were tempered by concerns about the amount of work needed to bring the reforms into reality.The 30-share index ended the day at 27,714, up 16.86 points, while broad-based 50-share index quoted 8,551, up 6.25 points at close.

Sensex, Nifty may hit fresh lifetime highs if GST Bill gets through Parliament

The Goods and Services Tax (GST) Bill has finally entered the last mile with it slated to be taken up in Parliament on Wednesday. Many on the Dalal Street believe the headline indices Sensex and Nifty will hit fresh highs if the GST Bill sees the light of the day, the likelihood of which has strengthened with government including the demands of the states and opposition parties in the fresh Bill.
The market has been on a wobbly road, largely upward, as it awaited the GST since the beginning of the monsoon session. Experts believe the positive sentiment in the market has mostly been built on the hopes that GST will get a green signal.

Sensex, Nifty consolidate; FMCG index up 2%, GAIL down 1%

The market is absolutely flat with the Nifty hovering around 8650. The 50-share index is up 15.95 points or 0.2 percent at 8652.50 and the Sensex is up 66.37 points or 0.3 percent at 28069.49. About 1121 shares have advanced, 1391 shares declined, and 143 shares are unchanged.

ITC, Maruti, Hero MotoCorp, HUL and ONGC are top gainers while HDFC, Wipro, GAIL, Lupin and Bharti are major losers in the Sensex. FMCG index is down 1.9 percent.

Japanese Prime Minister Shinzo Abe's cabinet approved 13.5 trillion yen (USD 132.04 billion) in fiscal measures on Tuesday as part of efforts to revive the flagging economy, with cash payouts to low-income earners and infrastructure spending.

The package includes 7.5 trillion yen in spending by the national and local governments, and earmarks 6 trillion yen from the Fiscal Investment and Loan Program, which is not included in the government's general budget.

The stimulus spending is part of a renewed government effort to coordinate its policy with the Bank of Japan, but growing concerns that the BOJ policy has reached its limit triggered the worst sell-off in government bonds in three years.

GOLDEN RULES FROM THE BOOK - THE ART OF TRADING

GOLDEN RULES FROM THE BOOK - THE ART OF TRADING

GOLDEN RULES FOR TRADING
Divide your Risk Capital in 10 Equal Parts.

As part of the Successful money management, it is always advised to divide your Risk Capital (which you can afford to lose) into 10 equal Parts and at any given time none of your Single Trade should have more than 3 parts of your capital in it even if you are in a winning position. At the same time always keep some spare money for any Buying Opportunity, which may come any time.

Trade ONLY in active & high Volume Stocks/ Futures. 

Many Traders get stuck with stocks for want of liquidity. Always rely upon Stocks which have reasonably high volume over a period of time. High Volume are always advised for easy Entry, Exit and Stop Loss. In low volume stocks the spread is too high and chance of Stop Loss limit getting failed is too high as there would be no Buyer or seller at your Stop Loss Level.

Come Prepared with a Trading Plan

Successful traders always keep their Trading Plans ready before entering into any transactions. One must prepare a Watch List or Probable candidates for Day's trading and remain focused on the movement of those stocks only. For example a Stock 'X' is on verge of a Bullish Breakout from any pattern or stock 'Y' has declined substantially after an initial sharp up move or stock 'Z' is close to an important support level. Successful trader would concentrate on the movement of those stocks only and enter the trade as soon as stock 'X' gives the anticipated breakout or stock 'Y' starts an upmove or stock 'Z' breaks the support level to initiate a trade for quick gains.

Never Over Trade

This is the most common mistake committed by Traders, particularly after a Streak of winning Trades. This mistake Generally not only wipes off all the profits, but puts traders in heavy losses. In order to remain in market while making consistent Profits, under no circumstances, traders should go beyond their Risk Capital.

Trade in 2 to 4 Stocks at a time with strict Stop Loss. 

In a Bull move, most of the stocks move up and similarly in any Bear Move, most of the stock moves southwards. As a Trader you know this fact but can you Buy 20 Stocks and try to make profit in all the 20 stocks just because all are moving up or vice versa in a Down trend? What will happen if market reverses without any indication on any bad news? Would you be able to monitor all your trades in such situation? Smart and Successful trader would trade in 2 to 4 stocks with strict Stop Loss and keep a strict vigil to avoid any misfortune in case of any eventuality.

Sell Short as often as you go Long. 

More than 90% of common investors/ Traders are 'Bulls' by nature. Because they love to see prices going up only. Stocks are bought by anybody/ corporate/ financial institutions/ Mutual Funds to make profit on rise. They have large holdings and mentally they wish and pray for the market to rise only. But facts are different. History shows that Bull Phases have shorter duration that Bear phases. So every stock that moves up will retrace back to 38%-50%-66%. Since 90% investors are Bulls by heart they normally do not book profit at higher levels to re-enter later at lower levels instead they prefer to increase their portfolio at lower levels. Successful Traders know how to capitalize such correction. They are always prepared to go 'Short' as often as they trade on 'Long' side.

Don't Trade if you are not Clear. 

Many Traders, because of their daily habits trade even when there are no signals to buy or short. Normally such situation arrives after a sharp rise or decline when stocks are adjusting their values. While some stocks attempt to move up, few may be taking breather before next move. Such situation are often confusing. There is no harm in taking rest for a day or two or short period if the trend is choppy, unclear or doubtful, instead of putting your money at higher risk.

Don't expect Profit on Every Trade. 

If you consider you are a smart trader who can make profit on every trade, you are 100% wrong. Always be flexible and accept the fact as soon as you realize that you are on wrong side of the trade. Simply get out of the trade without changing your strategy during the market; it may cause you double losses.

Withdraw portion of your profits.

The business of Trading is excellent as long as you are making profits. Unlike other business your losses can be unlimited and rapid if market does not move as per your expectations. While in other businesses you may have other remedial measures available but in trading it is you only who has to control it. Traders have large egos particularly after series of successful trades and their tendency to enlarge commitments in overconfidence may cause major financial set back. There fore it is must that trader must take a portion of the profit and put it in separate account. This is absolutely must for long term stability in the market. Read More about Stock Cash Tips.....