Tanay Parab’s Post

I’m happy to share that I’m starting a new position as Equity Research Intern at Nuvama Wealth!

The Bank of Japan has stopped its negative interest rate policy, the final one globally. Initially implemented to boost bank lending, demand, and inflation, it's now considered unnecessary. Strong wage increases are aiding in achieving inflation targets, rendering the policy obsolete. The consequences of this shift will differ across the economy and financial sectors, presenting both advantages and obstacles. Credits: Bloomberg #finance #equityresearch #linkedin #investing

India announces EV policy: reduces import duty for foreign-made EVs by overseas auto majors. Overseas companies can import up to 8,000 EVs annually valued at $35,000 or more with 15% reduced import duty for 5 years. Condition: Invest at least $500 million in local manufacturing over the next three years. Requirement to ramp up domestic value addition to 50% in five years. Bank guarantees are needed to claw back duty benefits if investment or localization conditions aren’t met. Allows low-barrier imports for test launches while assembly lines are set up. Tesla and other players face stiff stipulations, not the anticipated red carpet treatment. The policy may not significantly impact the electrification of traffic due to the high import cut-off. Protection is maintained for India's local automobile industry with the high price cut-off. Potential for Tesla cars on Indian streets as a symbolic win, but focus is needed on renewable power to sustain EV proliferation.

Electoral bonds were a significant funding method for political parties until recently. Legal challenges regarding anonymity of donations led to Supreme Court's decision to terminate the scheme. Mint analysis shows 23 companies have been responsible for half of total bond purchases since April 2019. Future Gaming and Hotel Services Pvt Ltd emerged as a top buyer. Electoral bond purchases allowed companies to make political donations encashable by parties. Credits: LiveMint #linkedin #finance #equityresearch

From 2019-20 to 2022-23, an analysis of Indian households' financial assets indicates a conservative approach, with 94% of funds allocated to fixed-income instruments such as bank deposits and small savings schemes, while only 6% is invested in markets. Examine the data closely to understand that the growth of India's mutual fund industry has not come at the expense of bank deposit growth in the nation. Credits: LiveMint #finance #linkedin #investing #equityresearch

Women have various mind blocks on money—men can do it better, fear of loss, fear of being judged, and the biggest one of treating their earnings as secondary and spending it. Women need to define their investment strategy based on research and not based on short videos on social media. Credits:LiveMint #linkedin #equityresearch #finance #investing

What is better Merger Or Demerger to unlock your value? Tata Motors Ltd, a $42-billion firm, has announced its decision to split its passenger vehicle (PV) and commercial vehicle (CV) divisions into two separate listed entities. On the other hand, Reliance Industries Ltd and Walt Disney Co. last month announced the merger of their television and media assets in India to create an $8.5-billion entertainment powerhouse. The two groups have chosen contrary routes to unlocking value and scaling up—increased focus through a demerger, and increased scale through a merger. Is one better than the other for achieving broadly the same goal? Credits: LiveMint #finance #equityresearch #investing #linkedin

According to real estate consultancy Jones Lang LaSalle (JLL), 2023 saw “record-breaking sales", with about 271,900 units sold in the top seven metros. Further, residential launches in 2023 were the highest ever, surpassing 2010. Sales for 2023 are expected to be around 300,000-315,000 units. (assuming interest rates decline, inflation remains moderate and GDP growth remains strong.) Growing residential launches are a direct growth driver for the paint industry. With new players entering the market, such as Aditya Birla, and the residential places growth rate is expected to be at 9-10%, an interesting competitive fight can be witnessed. Credits:LiveMint #linkedin #equityresearch #investing #finance

The global economy is struggling but India's GDP has posted a growth of 8.4% in Q3FY24. The Ministry of Statistics has changed its prediction for how much the country's economy will grow this year. They thought it would be 7.3%, but now they believe it will be even better at 7.6%. This is because, the new numbers show that in the first nine months of the year, the country's economy did better than expected. A report by Barclays says that "growth is moving faster than expected by the RBI, which means the central bank will see little urgency to cut rates while the MPC awaits for comfort on headline inflation". While there is an increase in GDP, the GVA has declined because of an increase in Net Taxes, which can be an increase in the collection of taxes by the government or a reduction in the subsidies. GDP = private consumption + gross private investment + government investment + government spending + (exports – imports) GVA = Gross Domestic Product + Net Taxes*. *(Subsidies on products – Taxes on products). Credits: LiveMint #finance #economics #gdp #linkedin

The government's focus in recent years has been on capital expenditure.💰 Capital expenditure is seen as the building of assets that yield social and economic benefits over time, for example, roads, bridges, and ports. The Indian government’s big bet is that its capex push will be the catalyst for the private sector to step in and invest on its own. There has been a steep decline in private sector capex since the global financial crisis of 2008. Importantly, the private sector never really recovered from that crisis and its after-effects. Till 2020-21, PSU capex kept pace with the capex of the main central government in absolute terms. In the last few years, central government capex has far outstripped PSE capex. The real question is whether the government can sustain this pace of increase. A sustained rise, especially in the private sector, will depend on demand picking up across the economy. Credits: LiveMint #finance #budget #investing #economics