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Wednesday, December 18, 2013

Stock market surprised as RBI keeps policy rates unchanged

The RBI decided not to change the policy rates. They remain:

•        Repo 7.75%

•        CRR 4%

•        Reverse repo 6.75%

•        MSF and Bank Rate 8.75%

The market was expecting a 25 bps hike in the repo rate due to the high CPI (11.2%) and WPI (7.5%) readings.

We too expected a 25 bps hike. So while this “non-hike” surprises us, as we noted on the Monday morning call, over the last couple of weeks, Rajan has indicated that the RBI will increase liquidity in the near term. He believes inflation is already on its way down because food price inflation will moderate and some vegetable prices will actually fall. Whereas growth remains weak with last week’s Industrial Production at -1.8%.

Also, in recent public fora, the FM has repeatedly argued against further rate hikes.

No change to our fixed income strategy. We’ll continue to recommend long-duration bonds / funds to long-horizon (3 years or greater) investors and recommend that short horizon investors invest in liquid funds, FMPs and selected arbitrage funds.

There is continued risk that yields may spike in the next few months.

Guidance from the RBI:

“The policy decision is a close one. Current inflation is too high. However, given the wide bands of uncertainty surrounding the short term path of inflation from its high current levels, and given the weak state of the economy…”

“…if the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall, the Reserve Bank will act, including on off-policy dates if warranted…”

Tuesday, December 17, 2013

Pharma Stocks upbeat as Glaxo Pharma announces to up its stake in Indian Biz

Markets continue to struggle to remain in the green, with continued profit-booking appearing at the slightest of upmove in the heavy-weighted stocks. The news on GLAXO PHARMA’s decision to enhance its holding in the Indian business at a significant premium has resulted into some of the other PHARMA & FMCG stocks gain momentum. Additionally, there also seems to be a distinct vacillation towards the large cap IT scrips – INFY and TCS seem to be the current favourites in the market, given the strong possibility of a turnaround led upmove in operating revenue for the larger players in the US markets.

Banking stocks continue to confuse marketmen esp. with the RBI’s mid-quarter credit policy around the corner later this week though there seems to be a wide consensus on the possibility of a 25 bps repo rate hike. It would also be worth mentioning that the RBI governor in his recent public appearances has been talking about adding liquidity into the system which may seem contrarian to the very clear need to hike repo rates particularly to rein in inflation. So it remains to be seen how the RBI governor does this tightrope walk once again and markets could take further cues from there by Wednesday. Before the RBI policy announcement, we also face the trigger of the FOMC’s announcement on the taper and we expect market volumes during the day’s session to be on the lighter side in light of this event on Tuesday.

The new 10-yr benchmark continues to be edging stronger on yields, almost within kissing distance of the 9% mark – the 25 bps repo rate hike almost seems to have been factored in. Any deviation from the expected move by the RBI on Wednesday would only impact the yields going ahead.

Tuesday, December 3, 2013

Sachin Karpe Explains How to Build a Successful Multi-Family Office

The exact affluent are in phenomenal numbers turning to multi family business settings to address a significant number of their budgetary and life issues. To contend, a large number of the universal suppliers, for example private banks and financier firms are making their own particular family office practices for their wealthiest customers. This customer exceptional renaissance is a capacity of the request of the family office model to the rich. Fundamentally, there are two sorts of family work places which is single-family and multi-family work places.

Sachin Karpe defines why do you require one? As your family's possessions proceed to develop, either steadily or as the aftereffect of a noteworthy liquidity occasion, and your existence comes to be more intricate, you might find it helpful to combine your necessities with a multi family office. A multi family office can additionally gives significant backing and aid in such regions as instructing cutting edge parts on the obligations of fortune, exchange of riches to cutting edge, multi era arranging and altruism arranging.

The single-family office:  Extensively talking, a solitary family office is an organizational structure that supervises the monetary and particular issues of one affluent gang. In light of the fact that a solitary family office is determined simply by the requirements and inclination of the underlying family, there is no standard for how one ought to be organized. Case in point, some single-family work places are lean ventures that center solely on contributing with a skeleton group while others are powerful associations with in-house staff, various seller relationships and a wide stage of administrations. This dissimilarity would not joke about this challenging to secure immovable criteria for how a solitary family office ought to be characterized other than its commitment to a sole crew. Despite the fact that it remains hazy, gauges of the amount of single-family work places go from a couple of thousand to the more than ten thousand.

The multi-family office: Theoretically, the multi-family office structure is an expansion of the present omnipresent fortune administration demonstrate; a business that aides firms participate in fewer, deeper and all the more enduring associations with well-off customers that are dependent upon modified results, specific mastery and responsive administration. As a general rule, notwithstanding, numerous sorts of substances distinguish themselves as multi-family business settings making a broad field of dissimilar contenders. In spite of the fact that today's multi-family work places frequently hail from different foundations – some were single-family work places looking to impart base costs, others were little aggregations of similarly invested families that saw a chance to grow, and still others were business elements that decided to center barely on the requirements of the ultra-affluent – now they are associations with regular properties and are run, more regularly than not, with an eye to benefit and development.

Family business settings, writ vast, have a tendency to furnish two guideline classifications of administrations: those that identify with supervising riches and those that identify with family back. Under the umbrella of riches administration we frequently find speculation administration, progressed arranging and private venture managing an account. At the same time, we regularly see under underpin administrations that incorporate managerial and lifestyle administrations.

In practice, each of these sub-classes is embodied particular items, (for example private value finances or deliberately faulty trusts) and administrations (bill paying and close security staff, for instance) dependent upon the requirements of the underlying families. The sheer extent of conceivable outcomes and mixtures imply that legitimately one of a kind and prickly issues might be tended to in wholly redid new sorts of family business settings without going amiss from the fundamental working structure. In the meantime, new sorts of family office structures are rising that are equipped to the requirements of corners inside the ranks of the.