Investment Advisors

New SEBI regulations may not be great news for RIAs Over the last few years, SEBI has been quite perturbed by the breed of advisors who literally survive on giving hot tips to the financial market customers. Most small investors tend to believe these tips as they are easy to understand and simple to execute.…

Penalizing CRAs

Rating agencies lack information but they need to be accountable Last week, SEBI penalized ICRA and CARE Rs.25 lakhs each for laxity in due diligence in the IL&FS case. Some of the proxy advisories were of the view that the penalty was too small considering the magnitude of the default by IL&FS. But that is…

SEBI bans pooling

Mutual fund distribution may undergo a shift as pooling is moving out Last week, SEBI announced potentially far-reaching changes in the way mutual funds are distributed in India. A full 7 years after Direct Plans were launched in India; regular plans of mutual funds continue to dominate the wallet share of customers. In a direct…

Sensex @ 42,000

What exactly is driving the BSE Sensex to new highs in December? The economy may be under pressure but the Sensex continues to make new highs and get closer to 42,000 levels. If you are wondering about the logic behind this rally, here it is. Reforms on right track Markets are convinced that the growth…

UTI AMC IPO

A glut of AMC shares can depress valuations as scarcity vanishes When the UTI AMC filed the draft red herring prospectus (DRHP) for its IPO, it was already anticipated. Like in case of other AMCs, the IPO of UTI AMC will be structured as an offer-for-sale, wherein the existing shareholders of UTI will get partial…

Operation Twist

How the Operation Twist moderates bond yields in Indian markets In the aftermath of the monetary policy, there was a sharp spike in 10-year bond yields in India. The yields shot up from 1.45% to 1.75% in a short span of time after the RBI decided to maintain status quo on repo rates. The financial…

Stamp Duties

What do uniform stamp duties mean for stock markets? During the week, the Ministry of Finance issued a circular announcing uniform stamp duty on all financial market transactions effective 09th January 2020. This had been on the cards for quite some time since Piyush Goyal first made the announcement in the interim budget 2019. Here…

STAGFLATION

High inflation and de-growth; India could be staring at stagflation In the last couple of days, we have seen the word “Stagflation” come back to haunt the Indian news headlines. The debate on stagflation has taken off after the inflation for November came in sharply higher at 5.54%. This was accompanied by negative IIP growth…

Trade Deal

Trade deal will happen, but implementation remains the key The global markets appeared enthused about the imminent trade deal between the US and China. As of now, Trump has approved the trade deal but China has not yet committed itself to that deal. It will be a full-fledged trade deal only after China accepts and…

Debt ETFs

Debt ETFs are a great idea but the big challenge will be indices The Securities and Exchange Board of India (SEBI) issued its draft norms for debt ETFs (exchange traded funds) on 29th November. This set the tone for the introduction of passive debt funds in India. Passive equity funds in the form of index…