#MoneyArth

HDFC Mutual Fund’s FMP bailout unfair? HDFC Mutual Fund has acquired all exposure to Essel Group companies in a big move of relief to holders. The troubled debt in Fixed Maturity Plans (FMPs) issued by Essel group equal to Rs 500 crores of debt is now in HDFC’s books. The announcement is valid for maturities in April and before September 30. Essel Group has been one of the companies which have bad debt and is on the verge of non-payment. HDFC AMC along with Kotak Mahindra AMC had received notices a month back from SEBI (Securities and Exchange Board of India) on their high exposures to these papers.  While it is certainly a relief in the interim, in case Essel Asset Management goes bust, the entire profit after tax (PAT) will be wiped out. The trailing 12-month PAT is Rs 931 crores. However, the purchase by HDFC allows the investors to exit this investment on maturity. Essel (Zee Group’s) consortium of lenders such as other mutual funds and banks have agreed to not...

Fed holds rates There has been no cut in the U.S. Federal Rate. The U.S benchmark rate was kept within the 2.25% - 2.5% range in the Federal Open Market Committee by a 9-1 vote. This is contrary to President Trump’s demand from the Federal Reserve to cut the rate. The U.S Fed rate has been kept at status quo but the Fed Chairman - Jerome Powell has kept the possibility of a cut in future.  Out of the 9 members, 8 were against any further cuts while 1 member was backing President Trump. However, traders are still hoping for a cut as soon as July and Powell announced in his press conference that he is keeping the door open on that possibility. The committee is looking to provide relief to people worried about growth prospects. The bond market is awaiting any further cuts and this possibility has left people more buoyed especially the traders and economists. The inflation has been below the 2% mark as required by the Fed and core inflation excluding volatile food and cru...

The meaning of 9 basic metrics that you can't do without if you are into stock investing. The budding stock-market investor doesn't have to just cope with the erratic nature of the market; he also has to understand the underlying metrics of stocks to make sense of them. Here we have compiled for you a list of basic stock-related metrics.  1. Stock price: Stock price is simply what a stock costs in rupees. If the stock price appreciates, you have got gains on the stock. If it declines, you are making losses. Since investors' fortunes are tied to the stock price, it is keenly tracked by them. While the stock price is widely followed, it communicates very little about the stock on its own. In order to put stock price in perspective, you will need to combine it with some other metric such as earnings. For instance, when seen in conjunction with earnings, it tells you about valuations. More on this later. Note that you can't say that a stock is expensive ...

5 ways Nirmala Sitharaman can boost growth to counter the economic slowdown With the new government sworn in and ministries allocated, the focus has now shifted to the full Budget for the year. Finance Minister Nirmala Sitharaman is scheduled to present the Budget on July 5, 2019. Two key issues facing her are the slowdown in the economic growth rate and rampant unemployment for which the government has been much criticized. She will also need to focus on boosting demand but remain on the path of fiscal consolidation at the same time. The government intends to retain the contents of the Interim Budget that was presented in February; but some tweaks may be in the offing. In order to achieve its objective, the new Finance Minister can undertake the following five steps: Providing monetary boost: This has already happened with the Reserve Bank of India having slashed its repo rate by 25 basis points on June 6. It could now look at boosting private investment which would h...

Moody's places Yes Bank ratings under review for a downgrade Bad news for Yes Bank continues unabated. In the latest such development, rating agency Moody’s Investor Service has placed the rating of the private sector bank under review for a possible downgrade. The agency is concerned about the bank’s large exposure to the Non-Banking Financial Company (NBFC) and real estate sectors, both of which are struggling. The bad news is not restricted to a possible downgrade but extends to continued resignations from its board as well as a fine levied by the central bank. All of the aforementioned developments – the ratings being placed under review, continued resignations from its board, and the fine by the central bank – took place on June 11 – a day before Yes Bank’s annual general meeting. As far as the ratings downgrade is concerned, Moody’s said that it believed that the continuing pressures on Indian finance companies, especially from the NBFC and real estate sectors, will be d...

DHFL pays off dues Quashing speculation regarding a likely default, Dewan Housing Finance Limited (DHFL) has cleared pending interest dues on bonds that it had sold last year. The company was scheduled to make the interest payment before Eid this year failing which speculation was rife regarding a possible default. Home financing company DHFL has paid over Rs 850 crore in pending interest to investors on June 11. According to information from people with firsthand knowledge of the payments, the company was able to clear its interest dues after it sealed another deal on loan portfolio sales. DHFL was scheduled to make the interest payment of a little under Rs 1,000 crore on June 4 on bonds it had sold over a year ago. It was only able to pay Rs 70 to 80 crore of its dues to retail investors in the past week. In a note to stock exchanges, the company confirmed that it had made the full payment toward interest payable on NCDs issued through a public issue in 2018. The par...