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MSEFSL is in the process of shifting DP operations to IL&FS. You would have received a letter informing about the same.
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Lot of water has flown under the #DeMonetisation bridge since our last article. Standing at the bank ATMs became order of the day since the announcement, and almost for a fortnight since 10-11-2016, almost looked like the woes of people would never end. Thankfully the situation is much under control now, and the cash, and the change is available at most places. Certain rural areas are still facing problems but they also would not last long either.
Whatever the problems, the public support has been amazing till now. Every honest tax payer, poor person and the middle class is happy with the decision. Need proof?
– In spite of such hardships people were seen standing in queues without any problem. They knew it will benefit them in long term.
– Political parties wanted riots to happen, SC warned of riots but none happened!
– The Bharat Bandh called by those parties supporting Black Money was ruthlessly rejected by people.
Yes some politicians have been badly affected. Just assume that the Decibel of Noise they make is equally proportional to the amount of Black Money they have lost.
Yes, I totally agree that the implementation could have been better so that the woes of people could have been a bit less, but these people shouting for poor people are only shooting from their shoulders for their own black money. None of them are actually interested for our welfare.
For this size of operation and for the guts shown by the government, we need give them some room for mistakes. Anyway almost everything is settled now.
In our previous article we had said that we should find a good support around 26300 which was tested the next trading day after demonetisation announcement. Later on with the fear of slowing GDP and FII selling, we again tested the range for good amount of time and recovered back sharply.
We maintain that any testing of recent lows of around 26000 will provide a good investing opportunity. The valuations will be fair in this area and should not be missed.
We also believe that the impact of demonetisation will not be too huge on the GDP. Any number above 7% will bring back the FII’s with a vengeance and the markets would remain stable.
Yesterday in an election rally in Uttar Pradesh, Prime Minister Narendra Modi said this:
Rich people are using the Jan Dhan accounts to deposit their Black Money. They are remembering the poor now.
He further said: I request you not to withdraw this money and give it back. If they ask for the money, tell them you will inform about this to the authorities. If they threaten you, ask for the proof that the money is theirs and give me that proof.
He further added: There are few ideas running in my mind, I’am checking if there is any possibility that these people are prosecuted and the money is left for you to use!
Though he has not promised, the announcement will send shivers in the opposition. Though he has not promised, it would be big move to let the money remain in the hands of Jan Dhan account holders who are by default below BPL.
Now, no one knows if this would be done or not, no idea if its legal, and if it is done how much money will the govt allow these accounts to keep and how much they may seize back.
I’am of the opinion that any such move by PM Modi may be will be Inappropriate, Unethical and Morally Incorrect, since it will be kind of Legal Bribery of the voters. But PM Modi will be Politically Cent Percent correct! And this will make him Morally Correct too, How?
– Loan waivers, Freebies and other Electoral benefits are not new to this country. Hence helping the poor alone in this way, will not be morally incorrect! Remember Jan Dhan account holders are poor people!
– Modi never said he will deposit 15 Lac in all accounts. But morally corrupt politicians always spread this narrative to attack him falsely. Hence now, if he ends up depositing this money, these people will have to praise him else face the wrath of people.
You must be wondering why am I talking about this.
As an Investor and Investment Adviser, I see this as a big boost to Indian Economy, just like how we saw the 7th Pay Commission.
‘The money deposited by every individual in their bank account now will be available to invest or spend in the formal economy. The money in the Jan Dhan Accounts, if not taken back fully, will also be spent in the formal economy. This will boost the company balance sheets.’ Hence good for the Stock Markets!
Hence Investors now need to look at the Long Term Picture. This will benefit our country and our future generations in big way. Should not we dream to see our economy compete with mighty China?
Don’t say ‘In the Long Term we all are Dead’, if we have such sadist attitude, none of us will think well for our future generations! It is up to us, if we want to remain selfish or make the world better for everybody. We are there or not, our country will be there eternally.
Interest Rates may be cut in the coming week by the RBI. Fed rate hike is expected in mid December. Though I feel the chances of Fed Rate hike is just 50:50, the market will remain Cautious and Volatile until then.
Hence remain Bullish. Be very Stock Specific. In 2018 you will appreciate that I told you this today! Take help of your Financial Adviser and, as said in our Diwali post, we would charge just 25% of our regular fee for our Armed Forces. Please inform them about this.
*The above are Vivek Karwa’s personal views. Feel free to contact us on the below details.
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Whatte week it has been. Till Tuesday 8-11-2016 everyone was discussing the US elections. This is probably the first time Indians have taken so much interest in American elections. Literally everybody was busy guessing the election results. Thanks to President Elect Mr. Donald Trump for having made the elections so interesting! The scenario is so much similar to India, politics was never so interesting here until Mr. Narendra Modi was declared the Prime Ministerial candidate in 2014 Lok Sabha elections. Even those who never knew ‘P’ of politics today Appreciate, Advice, Criticize him regularly. The latest trend is: If you are a Flop person in life, just criticize Modi to grab the headlines!
The two events which we need to discuss today are the American elections and the government’s drive against the Black Money by demonetizing Rs.500/- and Rs.1000/- currency notes, their outcomes and how would they impact our stock markets and our other investments and money!
Let’s first discuss the victory of Donald Trump:
First Trump because his win has become a smaller event the moment Modi appeared on TV and announced the clamp down on black money. Hence we would discuss that in detail and American election in brief!
Those who follow me on Facebook and other social media would appreciate that from the day American elections were announced, I was hoping and wishing Trump wins.
You can check the facebook posts here: https://www.facebook.com/vkarwa you can alternately search for Vivek Karwa on fb.
Unlike other analysts and advisors, I don’t believe in faking and trying to project self as diplomatic and try balancing all views so as to not look as if I’am siding with someone.
Kindly don’t even for a moment feel I’am trying to boast about myself here. I’am only making clear that I will vociferously support the Right Things, and oppose the Wrong Things with same vigour. Also accept and change if someone can correct my point of view in the right direction in case they are not in sync with reality.
People across the board were creating a narrative so that Trump loses the elections. They also scared the investing community that the world would come to an end if he wins. If you have been regularly reading MarketFastFood articles we were saying markets won’t get affected much. In fact Trump would be good for India, going with what he has hinted till now. If he changes later it would be different issue, but he still would be better than Hillary.
So what happened the day he won? There was some effect of demonetisation also, but I would attribute 99% of the moment to the American elections.
The Sensex opened at 26251, hit a low of 25902 and then recovered and closed at 27252. The next day it rallied! Now read the previous MFF post where we said: 27300 is a good support and in worst case scenario we may test 26300 +/- 200 points (meaning a range of 26100 – 26500).
We opened at 26251 which was very near to 26300, hit a panic low and closed at 27252 which was very near to 27300. Whoa!
The event has now passed and won’t affect markets too much. Post January when Trump assumes office the policies may affect/benefit certain sectors and stocks based on the policies he adopts. Hence let’s wait and watch.
Now let’s talk on the clamp down on Black Money:
We have all sort of dirty things in India, Pro-Pakistani people, Corrupt Politicians, Fake Currencies supplied by ISI from Pakistanis.
India was once called as the ‘Golden Bird’ and then came the invaders and post independence the rulers have been even Worse!
I will not blame the people, bureaucracy or anyone else for starting the corrupt practices. The initial blame goes only on the politicians who ruled us post independence. It was their duty to curb corruption with proper policies, but most of them were themselves busy making money as long as till 2014.
There are reports which say that the parallel economy in India is almost the size of the official one. People were fed up with the corruption. Then came Mr. Modi who grabbed power saying ‘Na Khaoonga, Na Khaane Doonga’ meaning ‘Will not ‘eat’ nor will allow anyone too’ Eat = Corruption
Due to these corrupt politicians the whole country got corrupted. Creating illegal money became rule of life.
Common Man has always been at the receiving end of black money! Even getting a School or College admission was not possible since someone else with lots of cash Bought the seat!
Finally some action has been taken, the action is a bold one indeed. This move is revolutionary and will show us big impact within a year!
The opposition as usual by talking against the action is supporting the crime. Be it Surgical Strikes or be it Black Money, they have no issues left, hence oppose anything and everything in the name of common man, not realising that Common Man is actually happy that finally someone is fighting the demon in the system.
‘We as common man should be ready to accept few days of trouble since the benefits of it will be immensely huge’
So what could be the possible benefits of this demonetisation?
– It is estimated that around Rs.10 Lac Crs may be deposited in the banks and would enter the official economy! As I write this article, Rs. 3.25 Lakh Crores have already been deposited.
– Rs. 5+ Lac Crs may never come back. We are already seeing the notes being burnt or thrown into dustbins. Those holding huge cash will have no option but to destroy them.
This means the Debt of the government which was created in last 10 yrs comes down. If debt come down the interest rates come down, inflation comes down, this money will be spent on the Common Man by the government. Hence Common Man is with the govt.
– The elections to be held in next few months will be a bit Fair! There won’t be Illegal Cash with the parties to be distributed. Those saying this move was eyed on elections are wrong. In India every year some or the other elections happen! Even if it’s political we will support it since the benefits for the Common Man are high.
– Those doing Vote Bank Politics will be badly affected. You can check for yourself that the Kashmir valley has been silent in the last few days, the terrorists there now don’t have money to fund the stone pelters. The terroirts funding groups operate with around Rs. 3000/- Crs of illegal money which has been trashed in one stroke by the govt.
– Pakistan’s ISI earns around Rs. 500 Crs annually by printing fake money. Their business has been shut overnight. This money was used to fund the terrorists. Now we can expect some peace.
– The import of Chinese goods will reduce. This will help Indian manufacturers.
Modi today has said that there are many more projects which are running in his mind to curb the corruption and black money. Hence expect few more actions. Enough time was given under the IDS to come clean now is the time to pay up for your illegal activities.
Read this article in a Pakistani news paper: http://www.dawn.com/news/1295150
Two worthwhile comments to be noted:
SIDNOV 09, 2016 01:13AM
WOW.. this is crazy. Step by step this man is changing India to be a GLOBAL POWER. For the good of the poor and law abiding Indian’s everywhere..
ALI RAZA RIZVINOV 09, 2016 03:39AM
You would be surprised that there are political leaders like Mamata Bannerjee, Kejriwal, and Digvijay Singh who are doing their traditional politics even on such an issue that will be such a huge benefit to India. Democracy does have its disadvantages.
India can be a super power if corruption is ended and all black money is brought in to the formal system. Taxes can easily reduce if that happens.
So what happens to businesses and the markets?
There would certainly be short term effect on the sales of companies, particularly luxury goods and things which are generally bough in cash. You can make the list yourself.
With GST coming in within next 12 months, coupled with curbs on Black Money, Indian Businesses and People are going to have Bright Future. We at VRIDHI have become even more bullish on India than ever before.
Hence investors buying the right sectors and stocks will make above average returns. Expect markets to recover. Anything below 26300 should be bought into – just be stock specific or you can call us for help.
There are many more points, will keep discussing them on social media. As said you can search for Vivek Karwa and VRIDHI on facebook. Also sign up for email alerts from VRIDHI. Visit www.VRIDHI.co.in on your computer.
So let’s resolve to take Short Term Pain for our own Long Term Benefits. And as voting public we need to give enough pain to those Supporting Black Money!
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If you all remember the current Prime Minister Mr. #NarendraModi was very vocal during his 2014 election rallies on #BlackMoney!
The day this govt took office they set up the SIT as demanded by the SC which was ignored by the earlier Manmohan Singh Govt, indirectly helping the scamsters and black money hoarders.
Even though this govt has been taking some action on Black Money the opposition has been continuously attacking Modi on Rs.15 Lacs. This Rs.15 Lacs story was created by the opposition. No one promised people that govt will deposit the money in their accounts.
The government launched the Income Disclosure Scheme.
Today PM Modi has dropped a Nuclear Bomb on the Black Money hoarders in which many many politicians will also be Trapped. Expect lot of opposition parties comparing this move to Emergency! It would be just their way of Crying!
Today PM Modi suddenly appeared on TV to address the nation and no one ever thought he may take this Bold move!
Govt has Banned all Rs.500/- and Rs.1000/- denomination notes in circulation with effect from Midnight today!
Govt has also announced that all Banks will be closed on 9/11/2016 so that No Illegal Money is brought to the banks to get exchanged. The announcement just 3 hours before the Ban ensures that people holding black money gets NO Time even to think!
An exchange window has been announced from 10/11/2016 to 30/12/2016
It can be called Surgical Strike on all those dealing in Black.
I expect Property to come down, Gold demand to reduce, White Economy to Boom, Organised sector to benefit, Banks will see +ve impact since use of Credit Cards will increase. Online shopping will increase. Liquor companies will benefit.
Some exemptions have been given. Stay connected with me on the below link for continuous updates:
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Before everything else, let me first, Wish You all a Very Happy Deepavali and a Prosperous New Year Samvat 2073. May we all find energy to achieve all that we dream in the ensuing year. Also, hope the New Year marginalises and brings to justice all those speaking and acting against our great country.
While some so called ‘Liberals and Seculars’ find problems with Diwali, even Malaysia is celebrating the festival of lights with us, have a look at the arrangements at airport there. There are many other countries joining us in our celebrations.
Now let’s discuss what can happen to our investments in the ensuing year and how one should be looking at future. In the recent video we had mentioned that the markets may remain volatile and may see a downward target of 27500 – 27300 at max but with upward bias. Markets actually saw a low of just few points below 27500 and then recovered back to where we are today. The volatility should continue and the danger clouds would gather only if we break 27300 levels.
Can the Sensex break below 27300? There are many factors looming above the markets right now and hence can happen. And if that happens we have chances of flirting with 26300 +/- 200 points, though the chances of that happening looks remote to us, particularly since out Target.2 for 2016 is still open, keep in mind we had already achieved Target.1 recently. Please read the Jan’2016 post.
To keep this post short, let me discuss 4 major events quickly which will affect our markets further for some more time to come. All other factors you can think of are either under control or even favouring the market.
The first major factor is Earnings Growth:
The results announced till now in this quarter show that the earnings are on verge of recovery. Though they have shown better performance in percentage terms, many of them are due to low base effect of last year. We need to keep in mind, the whole country was suffering from 2009 till 2015 and things have started showing signs of improvement in 2016.
But not to worry, overall earnings matter just for the Index level movements and market trend in general. There are many Individual Stocks which would outperform over next few years! We need to be stock specific and choose right companies and hold them for next few quarters.
Next is the GST:
Government seems to be serious and is moving at aggressive speed to get it implemented in 2017. There are lot of views, news, opinions and rumours floating. No point discussing them since the final thing may be different. Hence wait and expect good days once GST is in place.
Third factor is America Increasing Interest Rates in December:
Even if it happens, it may be just 0.25% and they may keep quite at least for 6 – 12 months post that. I believe the chances are just 50:50 hence nothing to worry much.
The last factor would be Donald Trump winning the US elections:
Forget America, if you seriously ask yourself who would be better for India? Donald or Hillary? If you reply honestly the answer would be Donald Trump. Keep aside the controversies, even Hillary has many with her, as I write this, FBI has reopened her case on the email scam.
Huge section of media and sickulars in American are targeting Donald Trump. The trend is similar to India where the current Prime Minister is questioned even for wind not blowing!
Who would win is not in our hands, Donald would be better for India, anyways who ever wins India will engage with the new president constructively, I’am sure on that.
Resolve to Invest this Diwali for long term, you can keep making changes to your portfolio as and when required but make sure your money remains invested and you don’t withdraw it for silly purposes. Specially for Buying a New Car!
We are celebrating and enjoying safely since our Soldiers are guarding us at the borders by sacrificing their family time and risking their lives for us. We need to salute them.
Whole India is sending their #Sandesh2Soldiers on this festive eve. We at VRIDHI would like to do our bit for our soldiers, we hereby announce that henceforth we would be charging just 25% of our normal charges for all ‘serving personnel of Indian Armed Forces’ We promise we will keep this 25% as our permanent tribute for our armed forces. You can let know about this to any soldier you know.
Wishing you all a Happy Deepavali yet again and keep in touch with us through email alerts, facebook and youtube.
Thanks and Regards
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