Tuesday 7 June 2016

Indian Equity Markets – The Weekly Report By Imtiaz Merchant



On the back of mixed news flows and the news flows likely to come next week, the Indian markets traded in a relatively smaller range and reduced volatility last week. It closed the week higher but with far too less a percentage as compared to the previous week. RBI policy, Global markets, crude prices, the much awaited monsoon and policy initiative by the government will determine the trend going forward. The current earning seasons ended relatively better with quite a lot of companies reporting results better than the expectations, hence the market held its head high to finish the week above 8200 first time since October 2015, signifying the inherent strength.


Technically, the market is poised for more upside in the near term but would face major resistance between 8340 and 8400 levels and until 8400 is surpassed on close basis the markets could remain in broad range and will be very stocks specific. On the lower side, supports for Nifty is available between 7900 and 8000 and so long as Nifty holds 7900 on close basis the markets will be in the favor of bulls therefore lower levels can be used for selective buying. In the best case scenario, if the markets manage to breakout 8400 it would certainly test the 8650 to 8800 level.



This is a very stock specific market thus investors should be prudent in selecting the stocks, and the most sensible way is to invest in companies that have least debts and good corporate governance. The portfolio as a whole should be well balanced with sectors and size like the auto, consumer good & services (discretionary & non discretionary), information technology and selected stocks from industrials & capital goods sector. One should also ensure that at least 50 to 60 percent of one's portfolio has large size companies in terms of value and it is wise not to invest more than 10 to 12 percentages in one stock of one's portfolio. This will ensure that the risk is well spread and the portfolio is more insulated from risk.

'Buying when others are selling despondently and selling when others are buying greedily requires great fortitude and wisdom, but would yield the highest reward'



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Monday 6 June 2016

RBI maintains status quo with interest rates

In line with analysts’ estimates, the Reserve Bank of India refrained from lowering policy rates in its second bi-monthly monetary policy meet on Tuesday. The central bank retained the repo or the repurchase rate at 6.50% on the back of higher food inflation and amid expectations of a rate action by the US Federal Reserve. Since the rate-easing cycle began in January 2015, the RBI has reduced policy rates by 150 basis points.

One basis point is one hundredth of a percentage point.

The Reserve Bank continued to maintain an accommodative stance and said if all goes well and there is a fall in food inflation, the RBI will be willing to lower rates further. 

Analysts expect the RBI Governor to lower rates on August 9, after getting a clearer picture on monsoon. With predictions of above normal rainfall, Rajan may also not have to worry about RBI’s FY17 growth guidance of 7.6%. India’s GDP grew at 7.9% in the fourth quarter of FY16 and full-year growth came in at 7.6%.

The move or the lack of it was largely expected with CPI, or consumer price inflation, coming in at a higher 5.4% in April from 4.8% in March, primarily on the back of food inflation. Wholesale price index, or WPI, too came in at 0.3% in April, after being in the negative territory for 17 consecutive months, though this may not have been a deciding factor for the RBI. 

Added to this, the market was expecting the US Federal Reserve to raise rates during its June 14-15 meeting. However, Friday’s weaker-than-expected jobs data (US) may result in Janet Yellen not raising rates until further indication that the US economy can remain or stay on track.

*source: Business Standard


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Ramzan 2016




Wednesday 1 June 2016

Here is a 10-point know-how on how much more you will pay:




1.    A 0.5 per cent "Krishi Kalyan" or farmer development cess will be levied on all services from today. This means that you will pay 15 per cent service tax rather than 14.5 per cent. So watching movies, dining out, travelling, making phones calls and buying insurance and property will be costlier. 
2.    Train tickets for AC class will also become costlier as the "Krishi Kalyan" cess will levied purchase of these. Service tax is not applied to non-AC class travel in trains. 
3.     Petrol prices have been hiked by Rs 2.58 a litre and diesel by Rs 2.26 as part of fortnightly revisions by oil marketing companies in the wake of increase in global oil rates.  After the price revision, petrol will cost Rs 65.60 per litre in Delhi and diesel Rs 53.93/litre. 
4.    The price of non-subsidized LPG cylinders has also been hiked by Rs 21 and will now cost Rs 548.50 in New Delhi after the price revision. 
5.   The price of aviation turbine fuel was today sharply hiked by 9.2 per cent. Jet fuel accounts for nearly half of the operating expenses of airlines in India and will impact ticket prices. 
6.     A luxury tax of 1 per cent will be levied from today on cars that cost over Rs 10 lakh. This extra tax will be collected by the seller of the car and will be applicable on the ex-showroom price. However, this extra payment can be set off against the total tax liability of the buyer.
7.    Payment in cash for goods and services worth more than Rs 2 lakh will attract a 1 per cent tax collected at source from today.  Finance Minister Arun Jaitley had in this year's Budget had imposed the tax to discourage high-value transactions in cash. 
8.   However, for cash purchase of gold jewellery, the limit of Rs 2 lakh will not apply. It stays at Rs 5 lakh. 
9.   For stock market traders, sale of options will also attract an increased securities transaction tax (STT) of 0.05 per cent. Earlier, the rate was 0.017 per cent.  Options are contracts that give the buyer the right, but not the obligation, to buy or sell a security or other financial asset at an agreed-upon price during a certain period of time.
10.  The Congress has slammed the government for the price hikes. "Everything is expensive now. Is this achhe din? The government has burdened the common people," said Congress spokesperson Randeep Surjewala.  

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Thursday 26 May 2016

Come join us @ Aurangabad on 28 & 29 May 2016. Meet our Executives & know more about Islamic Finance.

Pragmatic wealth management (Islami Tijara) coming to

Aurangabad this weekend-28 & 29 May 2016 @ "Parwaaz", Micro 

& Small Business Summit & Exhibition at Aam Khaas Maidan, 

Aurangabad. Please visit stall no.68 from 10 am to 10 pm, to meet 

our executives and discuss about Islamic Finance.




Contact us for  more information. Also listen our MD, Mr. Imtiaz 

Merchant speak  on Islamic Finance and its benefits, implications

and application in India and otherwise. For more information, 

contact us on 8108178683 or email us at 

contact@islamitijara.com contact@pragmaticwealth.net.

Wednesday 11 May 2016

Asian Paints Q4 net up 20% to Rs 409 crore

Asian Paints today reported a 19.87 percent increase in consolidated net profit at Rs 408.75 crore for the March quarter. The company had posted a net profit of Rs 340.97 crore in the corresponding period last year. Its consolidated sales during the fourth quarter rose 12.28 percent to Rs 3,919.23 crore as against Rs 3,490.39 crore in the year-ago period, Asian Paints said in a BSE filing.



"The decorative business segment in India registered double digit volume growth in the fourth quarter. Lower raw material prices aided gross margins... The international business registered good performance in the fourth quarter on the back of growth in key markets of the Middle East and Bangladesh," MD and CEO of Asian Paints K B S Anand said. For the entire fiscal, the firm's consolidated net profit surged to Rs 1,726.21 crore as against Rs 1,395.15 crore in 2014-15. Net sales stood at Rs 15,330.72 crore in 2015-16 compared with Rs 14,005.33 crore in the previous fiscal. 


In a separate filing, Asian Paints said its Board of Directors has approved payment of final dividend of Rs 5.30 per equity share of the face value of Rs 1 each for the financial year ended March 31, 2016.

Asian Paints has informed that the Board of Directors of the Company at its meeting held on May 11, 2016, has approved the payment of final dividend of Rs. 5.30 per equity share of the face value of Re. 1 each for the financial year ended March 31, 2016, subject to the approval of the shareholders at the ensuing 70th AGM.


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Thursday 21 April 2016


News Brief (21st April 2016)

India Ratings downgrades SAIL’s rating

Credit rating agency, India Ratings and Research has downgraded Steel Authority of India's (SAIL) rating to 'AA' from 'AAA' with negative outlook. The downgrade reflects the company's credit metrics being lower than the rating agency's expectation for the first nine months of last fiscal. The steep fall in steel prices since January 2015 led to SAIL registering Ebita losses in first three quarters of last year and the consequent worsening of its credit metrics. The state-owned company is undertaking capital expenditure of Rs 61,870 crore. This apart, it will spend an additional Rs 10,260 crore to augment raw-material availability. SAIL is India's largest steel producing company. The company is among the five Maharatnas of the country's Central Public Sector Enterprises. The company has five integrated steel plants, three special plants, and one subsidiary in different parts of the country.

Apollo Hospital’s arm partners with JIYO

Apollo Hospitals Enterprise's arm Apollo Life has entered into partnership with JIYO, a wellness company on April 18, 2016, to launch a wellbeing platform 'Apollo JIYO' to address employee health and wellbeing. The platform has personalisation and health tracking tools like sleep patterns, stress reduction and exercise tips for corporate users through mobile and web application. Through this partnership, Apollo will be able to bring global experts, products and services faster and directly to the smart phones and the desktops. Apollo Hospitals is the leading private sector healthcare provider in Asia and owns and manages a network of speciality hospitals and clinics, a chain of Pharmacy retail outlets across the country, and provides Consultancy Services for commissioning and managing the Speciality Hospitals.

Tata Power installs water softener exchange at Jojobera Plant
Tata Power, India's largest integrated power company has installed a softener exchanger of 15 M3 capacity / hour to improve the performance of waste water recovery system at its Jojobera plant, Jamshedpur. The objective of installing the softener exchange was to keep the cooling towers of the power plants in a healthy condition, so that the portion of water that is shed on a routine basis, is free from impurities and can be reused for other purposes instead of being disposed of as waste water. The system consists of various filters such as press sand filter, carbon filter, ultra filtration units and reverse osmosis units in addition to various chemical dosing systems. This installation will not only enhance the life of the plant by preventing choking of filters, but will also keep the treatment system in a healthy condition. Tata Power is India's largest integrated power company with a growing international presence. The company together with its subsidiaries and jointly controlled entities has an installed gross generation capacity of [9100] MW and a presence in all the segments of the power sector viz. Fuel Security and Logistics, Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading.



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Saturday 5 March 2016

Market Brief for 8th March 2016

Markets on the backdrop of Union Budget 2016 rebounded sharply during last week to finish the week on robust note, up above almost 7 percent. This was one of the highest weekly gains since past many years. The rally was mainly led by banking stocks and battered down metal stocks. The Union Budget, although was a neutral budget, but it projected a fiscal deficit target of 3.5 percent as a part of fiscal consolidation, and announcement of INR 25,000 crores infusion of capital to give flip to banking sector stocks, as well as talks about merging PSU banks gave a boost to the banking stocks. Moreover the firm metal prices globally saw improvement in the metal stocks. One more point which went in the favour of the markets were the strong rumours, that of increase in capital gains tax on investment in the markets, which eventually did not happen, and markets took the news cheerfully.  Although the markets gave a smart recovery, the worst is still not behind us. It needs to be seen whether RBI reduces the interest rate, how the forthcoming quarterly results of companies turn out to be, and how the monsoon factor plays out. Global economic markets will also be watched closely.



Technically, the markets being oversold and having maintained the support of 6960, recovered sharply on the back of bear covering and in anticipation of better things to come. Where levels are concerned, the market is poised against the key resistance of 7600, and likely to react from thereon to test lower levels. On the lower side, there are multiple supports right from 7200 to 7400. As long as the markets are above 7200, it is in the firm hands of the Bulls, and markets are likely to see higher levels in times to come. The broader term range for the market is 7200 to 7600, and the short term range is between 7300 and 7500.     


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Tuesday 1 March 2016

Budget 2016-2017: Six key effects on the common man's wallet

In a Union Budget that clearly indicated a shift in focus to the rural economy, Finance Minister Arun Jaitley introduced a slew of taxes and cess to be imposed on services to help rural welfare programmes. 

 Islami Tijara takes a look at some of the highlights from the tax proposals in the Union Budget 2016-17.

1.      Income tax remains unchanged
Income tax slabs for the financial year 2016-17 has remained unchanged, the finance minister announced in the Parliament today.  


2.      House rent allowance cheer
Jaitley said that the tax exemption for house rent allowance will be raised to Rs 60,000 from the current Rs 24,000-level. The move is likely to bring in relief to the common man.

3.      Service tax
The government, in the Union Budget for 2016-17, decided to keep service tax rates unchanged at 14.5% (14% service tax + 0.5% Swacch Bharat Cess) Certain announcements also ensured there were some ‘taxing times’ ahead for the common man.

4.      Buying a car costlier now
An additional 1% tax on luxury cars above Rs 10 lakh was imposed by the Centre in the Union Budget today. The Centre also imposed an additional infrastructure cess of 1% on small petrol cars and a 2.5% cess on diesel cars. 

5.      Krishi Kalyan Tax
Jaitley announced a 5% tax on all taxable services under the Krishi Kalyan tax in a bid to benefit the farming community.

6.      Cigarettes to cost more
Excise duties on various tobacco products other than beedi have been raised by about 10 to 15%, Jaitley said in the Parliament. 


Friday 19 February 2016

Market Brief for 22nd Feb 2016

Amid stock specific moves, markets ended the week on a robust note, perhaps, one of the best weekly close from quite some time, with gains of almost 3 percent. However, none of the sector acquired leadership and it was all very stock specific. On the macro front, crude prices appear to be stabilising around these levels and global equity markets have also managed to regain some ground. Markets are still in a jittery mode, with lot of events lined up like the Union budget, policy reform implementation, US data, geo-political scenarios, oil demands, and Chinese market recovery are some of the factors markets will watch very closely. Since the undertone for the market is bearish, any bad news will crash down the markets and good news flows would help the market to sustain the existing levels, and in that case, markets would at best remain range bound. It appears that only in the third and the fourth quarter will the market firm up, and will be susceptible to falls. 



Technically too, market looks weak and vulnerable, though 7000 on the Nifty offers a good support, a close below this level, markets would witness a renewed selling and perhaps would test 6650 levels. On the higher side, markets in terms of Nifty would face stiff resistances between 7300 and 7500. Though a test of 7500 on the Nifty is not ruled out, but all this would be a throwback rally on the backdrop of mighty fall. The short term range one would look out for is between 7000 and 7400, and the markets are exactly on the median point.

Investors should show some courage and exit from fundamentally and technically weak stocks in rallies even if one is incurring some losses, and at the same time shift into fundamentally strong stocks with good management and that are more domestic led. This is a good portfolio restructuring time.   


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Sunday 7 February 2016

Market Brief – 8th Feb 2016

Across the board, mixed news flows kept the market volatile last week which ended the week marginally lower, however, Friday, for the day it closed on robust note. Prevailing uncertainty will keep the markets volatile and jittery during this month with a negative bias. Some glimpses of hope were seen in the form of announcement by the RBI Deputy Governor, taking measures to improve cap-ex in infrastructure, finance ministry is still very hopeful on GST getting cleared in the coming session of Parliament, lately some good results declared by corporate, and crude off late, showing some traction getting stabilised giving some hope for markets to make a bull case. 



Although, there are some positives but it really needs to be seen how the implementation of 7th Pay Commission and the Union Budget events unfold and. However, if the above mentioned positives fail to deliver, since the undertone of the market is bearish, markets can very easily witness sharp falls.



Technically market too is poised to take out a sharp rally or may witness spiky slide. In terms of levels on nifty a close below 7350 would see a retest of this year’s low of 7240 if broken then a capitulation will take the markets way down to 6700 to 6800 the ultimate support for bulls to be hopeful in the long term, on the other hand if the Nifty manages to surpass 7610 and then 7725 on close basis that seems a bit difficult than we could perhaps conclude that the worst is over for the markets. So in the short term one needs to watch out 7350 on the lower side and 7725 on the higher side both on close basis.


We once again reiterate and advice investor’s fraternity to show some resilience and invest at regular intervals in growth stocks particularly those, which are having least debt leverage and are well governed.


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Thursday 4 February 2016

Hexaware Technologies Ltd – Quarterly result December 31, 2015



The Audited Standalone results for the Quarter ended December 31, 2015:

The Company has posted a net profit of Rs. 809.574 million for the quarter ended December 31, 2015 as compared to Rs. 767.792 million for the quarter ended December 31, 2014. Total Income has increased from Rs. 3063.276 million for the quarter ended December 31, 2014 to Rs. 3332.876 million for the quarter ended December 31, 2015.

The Audited Standalone results for the Year ended December 31, 2015:

The Company has posted a net profit of Rs. 3329.719 million for the year ended December 31, 2015 as compared to Rs. 3183.943 million for the year ended December 31, 2014. Total Income has increased from Rs. 11844.468 million for the year ended December 31, 2014 to Rs. 13112.862 million for the year ended December 31, 2015.

 

The Consolidated Results are as follows:

The Audited Consolidated results for the Quarter ended December 31, 2015

The Group has posted a net profit after tax of Rs. 993.613 million for the quarter ended December 31, 2015 as compared to Rs. 872.593 million for the quarter ended December 31, 2014. Total Income has increased from Rs. 7007.654 million for the quarter ended December 31, 2014 to Rs. 8282.491 million for the quarter ended December 31, 2015.

The Audited Consolidated results for the Year ended December 31, 2015

The Group has posted a net profit after tax of Rs. 3932.113 million for the year ended December 31, 2015 as compared to Rs. 3201.516 million for the year ended December 31, 2014. Total Income has increased from Rs. 25736.693 million for the year ended December 31, 2014 to Rs. 31406.803 million for the year ended December 31, 2015.

Shariah Compliant Status – Compliant (Midcap/Info. Tech.)
Debt to M.Cap – 0%
Recv. to M.Cap – 4%
Cash to M.Cap – 1%
Int. Income to Total Income – 0%


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