Author: Kshitiz Jain

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	11-Aug-23	4-Aug-23	Change
Nifty 50	19,428	19,510	-0.42%
Nifty 500	16,860	16,882	-0.13%
Nifty Midcap 50	10,822	10,735	0.81%
Nifty Smallcap 100	11,748	11,691	0.49%

Chart Ki Baat

Changing Landscape of Automobile Sector in India

Bazaar Ki Baat

In the 10th edition of “Bazaar ki baat”, our team discussed what moved the market in July, sectoral performance, Why fund size matters in smallcap investing, and why Inflation is called the invisible tax.

Watch here.

Here’s the list of curated readings for you this week:

Personal Finance

• RBI to enable borrowers to reset home loan rates whenever they want – RBI Governor Shaktikanta Das revealed that the central bank will soon introduce a framework allowing borrowers to transition from floating interest rates to fixed interest rates. Read here.
  
  
• SEBI backtracks on regulating Finfluencers . – SEBI has clarified that finfluencers do not come under SEBI Investment Adviser regulations. Read here.
  
  
• Low cost is the major driving factor behind passive funds popularity: Survey – 61% of investors say they have invested in at least 1 passive fund, underscoring the fast-growing adoption of passive funds in India. Read here
  
  
• Having a corpus as a goal – does it help? – For individuals who do not have defined goals, targeting a wealth number helps. Read here.

Investing

• Services sector and personal loans continue to see credit demand – Gross bank credit offtake witnessed an accelerated rise of 16.2% year-on-year (y-o-y) in June 2023. The growth was driven by services, personal and agriculture loans. Read here
  
  
• Bigger and Greener : India automobile sector – India’s light-vehicle market has grown from “small is beautiful” to favoring larger models. Read here.
  
  
• Indian equities have witnessed the most significant earnings growth as compared to other major economies – India’s earnings growth continues to support the market. Read here
  
  
• Automobile sector in India seems to be at an inflection point – Growth in India’s per capita GDP has so much widespread implications across sectors. A country’s per capita GDP and Passenger Vehicle sales have a strong positive correlation. Read here.
  
  
• India equity valuations has seen an uptick post recent rally. – The difference between India 10Y bond yield and earnings yield rises above long-term average, reducing the attractiveness of equity as compared to bonds. See here
  
  
• Uday Kotak is wanting for the market’s support – The stock has underperformed the benchmark Nifty Bank Index by nine percentage points since an April vote where 99% of shareholders supported Kotak continuing as a non-executive director. Read here
  
  
• What FIIs bought and sold in July? – The FPI Assets in India at $647 billion is getting tantalizingly close to the previous peak of $667 billion touched in October 2021. Read here.

Economy

• RBI pauses with a hawkish tone – The Reserve Bank of India held its key lending rate steady on Thursday as expected but moved to reduce the amount of cash in banking system as inflation concerns resurfaced following higher-than-usual seasonal spikes in food prices in recent weeks. Read here.
  
  
• India merchandise exports in free fall – The headwinds of slowing global growth are beginning to buffet India’s trade on all sides. Read here.
  
  
• India’s Demographic dividend: key to unlock its global ambition – The sheer size of India’s workforce is a major competitive advantage as the country tries to become a global design and manufacturing hub. Read here.
  
  
• The exclusive network behind India’s global tech success: The IITs themselves have embraced their startup-spawning potential — there are currently 4,459 Indian startups that have at least one IIT-educated founder, according to Tracxn. Many of the schools run campus programs to foster entrepreneurship. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	4-Aug-23	28-Jul-23	Change
Nifty 50	19,510	19,636	-0.65%
Nifty 500	16,882	16,941	-0.35%
Nifty Midcap 50	10,735	10,686	0.46%
Nifty Smallcap 100	11,691	11,595	0.83%

Chart Ki Baat

Gyaan Ki Baat

Corporate Debt Market Development Fund (CDMDF) – Looking at the liquidity crisis in 2008 and the recent Franklin Templeton case, CDMDF was introduced in Union Budget 2022 by Finance Minister and was established on 27th July 2023. The main objective of this fund is during liquidity/economy crisis, investors can freely redeem their funds.  In the past whenever there is a credit issue in the market, the whole industry gets into panic causing a huge rush towards redemption of their investments. To cater the liquidity problem of AMC, Corporate Debt Market Development Fund will buy the securities from AMC and provide them the liquidity.

CDMDF is an alternative investment fund and can be subscribed by AMCs who are running debt mutual funds. This fund is managed by SBI Mutual Fund and will ensure that funds are available to participating mutual funds in the event of liquidity crisis.

Here’s the list of curated readings for you this week:

Personal Finance

• ITR filings in AY24 jump 16%, peak to record high of 6.77 crore: CBDT. – The returns filed through ITR-2 forms, used by resident individuals and Hindu Undivided Family (HUFs) with income of over 50 lakh, account for 11.97 percent (81.12 lakh). Read here.
  
  
• The Return on Hassle Spectrum – An interesting chart showing the difficulty/hassle of an investment compared to its expected annualized return (note: expected). Read here
  
  
• India’s women are saving more – RBI report shows women account for 39% (₹37 lakh crore) of overall individual deposits. Read here.

Investing

• “What does it take to build a company that lasts 100 years?” – India is home to multiple enterprises that have redefined strength and commitment in their path of survival. Read here
  
  
• Investing at All Time Highs! – Focus on the market cap. as one goes down the marketcap curve, the prospect of higher intensity drawdown increases. Read here.
  
  
• Indian corporates are turning to big banks to help fuel their growth. – From 2021 to 2022, the share of Indian corporates working with one of the largest Indian private sector banks for overall corporate banking services increased to 38% from 33%. Read here
  
  
• Morgan Stanley upgrades India to ‘overweight’; downgrades China – India is arguably at the start of a long wave boom at the same time as China may be ending one. Read here
  
  
• International Coal Prices have softened in Q1FY24. – The heightened coal prices was a big pain area for certain industries last year. While the prices have now dropped compared to FY22, they have remained above the pre-Covid-year price averages. Read here.

Economy

• Fitch downgrades U.S. long-term rating to AA+ from AAA – “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.  Read here.
  
  
• India Now Among Apple’s Top 5 Markets – The premiumization trend gained momentum as the segment grew at a faster rate of 112% YoY. Rise of a value-based incentive system for retailers, aggressive promotions, availability of credit through various financing schemes, and OEMs’ focussed approach are driving premiumization in India. Read here.
  
  
• India’s rice export ban trigger panic:  India, the world’s largest rice exporter, banned the exports of non-basmati white rice on Jul. 20. India accounts for more than 40% of world rice exports, which amounted to 55.4 million metric tons in 2022  Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	28-Jul-23	21-Jul-23	Change
Nifty 50	19,636	19,745	-0.55%
Nifty 500	16,941	16,904	0.22%
Nifty Midcap 50	10,686	10,447	2.29%
Nifty Smallcap 100	11,595	11,530	0.57%

Chart Ki Baat
ITC demerger of hotel business

Gyaan Ki Baat

New Fund Offer – NFO

A “New Fund Offer” (NFO) is the term used when a mutual fund scheme is initially made available for investment. In order for the fund manager of that mutual fund scheme to construct a portfolio based on the investment goals of the scheme, NFO must amass a sufficient quantity of initial corpus. The fund has no historical return data, which is one of the biggest risks of investing in an NFO. The mutual fund house experience and performance needs to be reviewed while making this decision.

Here’s the list of curated readings for you this week:

Personal Finance

• Explicit Fee disclosures in rupee terms may be the way forward for Mutual funds – A recent study that may have important policy implications for the much-discussed MF expense (TER) regulations in India and even globally. Read here.

• How is the Top 1% households in US invest their money?– The top 1% also has a higher share in things like cash, bonds, and private businesses. But you can see that most of their wealth is invested in the stock market, while housing is by far the biggest asset for those in the bottom 90% . Read here

• Towering Tech – US Tech’s current adjusted HHI level of 9.6 is in the 99th percentile of observations, indicating an extreme level of concentration for the sector compared to the long-term average of 4.9. When concentration has been relatively high in the past, it has subsequently tended to decline. Read here.

• NRI Series 7 – NRI Mutual fund Taxation: Things to Know – Mutual funds are a preferred choice of #investment not just for Indians but also NRIs. But a lot of NRIs worry about the tax implications of their investments. Watch here.

• Global fintech funding nearly halves to $23B in H1 2023  – Venture capital funding of fintech startups has plunged globally by 49% year over year to $23 billion in the first half of 2023 amid an economic downturn.. Read here.

• India’s Jio Financial Services, BlackRock to launch asset management venture – The two companies are targeting an initial investment of $150 million each in the joint venture, Jio Financial said in a statement on Wednesday. Read here.

Investing

• PPFAS CIO Rajeev Thakkar talks about his investment style – Management quality, promoter quality, low leverage, and good business characteristics. Read here

• Attrition Rates: Foot Soldiers Of Private Indian Banks Hopping Posts More Frequently –  aggressive sales targets, limited immediate growth potential, workplace behaviour and long work hours are some of the reasons. Read here

• ITC demerger and the rationale behind it – Hotels contributed only 2% of ITC EBIT in FY23ITC is yet to declare the share swap ratio for the hotels subsidiary and has also not declared why it chose to keep 40% stake in it. Read here

• Vedanta’s dividend payouts to parent concern lenders – Banks have turned cautious on their exposures to Vedanta Ltd, worried that sizeable dividend payouts to ease the parent’s debt burden might stress the balance sheet of the domestic entity to which they have loaned money, said two bankers close to the matter. Read here.

Economy

• Fed lifts rates, Powell leaves door open to another hike in September – Powell made no promises either way, with a September meeting eight weeks from now considered “live” for another rate increase, though a continued slowing of inflation and weaker economic data may also prompt policymakers to pause. Read here.

• The slow pace of 2-wheeler market recovery – 2-wheelers have still not been able to recover to the pre-covid levels. Most of the other indications in ICRA business activity monitor are much above the pre-covid levels.. Read here.

• FM to launch two important initiatives for corp bond market : Finance Minister Nirmala Sitharaman will launch the backstop fund for corporate bond market and Limited Purpose Clearing Corp for repo transactions in corporate bonds in Mumbai on Friday.  Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.