How AI is Changing Commodity Trading in India

According to RBI, Indian banks’ bad loans could rise sharply by September, the highest in more than 22 years, creating a risk to the broader economy. The gross bad loans on bank balance sheets could rise to 14.8% as compared with the previous year which was 7.5% in September 2019.

In the worst-case scenario, the gross bad loans could rise to 14.8% - by the end of the second quarter of FY 2021-2022.

As per the assessment done by RBI, gross NPA has been consistently decreasing over the last two years, with the number at 7.5% in July-September 2020.

Under the worst stress scenario, RBI has marked a 7.6% contraction in the six months to March 31. As per the stress test conducted for the banks, the regulators observe three scenarios for the gross domestic product growth where 0% growth is counted as a baseline scenario, -2.1% as medium stress, and -7.6% as large stress.

The stress test was introduced by RBI in order to assure the bank's asset quality. Such tests tell the economic impairment latent in bank portfolios, with an aim for capital planning.

Among the large sectors, whether it is an industry, agriculture, asset quality has been improved noticeably, in September 2020 over March 2020, with a decline in gross NPA and stressed advance ratios.

Amongst the top 100 borrowers, the asset quality trends have been positive for the banking system. However, because of the moratorium on repayments that ended on 31 August, the standstill on asset classification and restructuring of loan accounts, the data on fresh loan impairments reported by banks may not reflect the true state of assets.

Shaktikanta Das, the governor of India, reiterated that the banks can face balance sheet impairment and capital shortfall once regulatory reliefs are rolled back. Further, he also said that liquidity and financing conditions have helped banks to improve their performance to a greater extent.

Earlier, RBI’s stress testing models have been criticized by numerous experts. Soumya Kanti Ghosh, chief economic advisor, State Bank of India mentioned that RBI’s stress testing methods could have a significant upward bias.

RBI’s stress testing models came with several disclaimers considering the uncertainty regarding the unfolded economic outlook and the extent debt recast benefits, the ratios are very sensitive to change.

RBI had allowed banks to reallocate loans for borrowers whose cash flow has been badly affected by Covid and allowed such loans to be relaxed despite their repayment norms being relaxed.

Implications of Capital Adequacy

The capital adequacy ratio is expected to drop from 15.6% in September 2020, to 14% in September 2021 under the baseline scenario and to 12.5% under the several scenarios, the RBI said.

The stress test results indicate four banks may fail to catch up the minimum capital level by September 2021, under the baseline scenario, without factoring in any capital infusion by stakeholders.

It is expected that the common equity tier I of scheduled banks may be reduced from 12.4% to 10.8 % under the baseline scenario.

To sum up .. the banking system’s capital base may be able to withstand the stress coming from the COVID 19 pandemic, some individual banks are required to support through phase-wise capital infusion, the RBI said.

चार सप्ताह से सीमित दायरे मे चल रहे अप्रैल वायदा सोने के भाव, बजट 2021 मे सीमा शुल्क कटौती होने से 49700 रुपय प्रति दस ग्राम से ऊपरी स्तरों से फिसल कर 47200 रुपय के निचले स्तरों तक पहुंच गए। सोने और चांदी मे सीमा शुक्ल 12.5 प्रतिशत से घटा कर 7.5 प्रतिशत कर दिया गया और 2.5 प्रतिशत एग्रीकल्चर इंफ्रास्ट्रक्चर विकास उपकर एवं 10 प्रतिशत अधिभार जोड़ा गया है।

जिससे कीमती धातुओं मे पहले 12.5 प्रतिशत लगने वाला सीमा शुल्क घट कर 10.75 प्रतिशत रह गया है। अंतर्राष्ट्रीय बाजार मे सिल्वर बार और सिक्के की हाज़िर मांग मजबूत होने और सिल्वर माइनिंग शेयर मे बढ़त के कारण कॉमेक्स वायदा चांदी मे तेज़ी देखि गई है। जिससे घरेलु मार्च वायदा चांदी मे शुल्क कटौती का हल्का प्रभाव देखा गया और सोने के भाव मे बिकवाली का दबाव रहा।

अंतराष्ट्रीय बाज़ारो मे सीमा शुल्क कटौती को सकारात्मक लिया गया है क्योकि भारत कीमती धातुओं का बड़ा आयातक है और भाव मे गिरावट से मांग मजबूत होने की सम्भावना बढ़ती है। कॉमेक्स वायदा सोने के भाव मे 15 डॉलर प्रति औंस की बढ़त दर्ज की गई और इसकी कीमते 1870 डॉलर के करीब रही है।

जबकि कॉमेक्स वायदा चांदी 9 प्रतिशत तेज़ होकर 29.5 डॉलर के स्तरों पर पहुंच गई है। घरेलु वायदा सोने मे बजट के दौरान 2 प्रतिशत की गिरावट दर्ज की गई और इसके भाव 48800 रुपय प्रति दस ग्राम के करीब रहे। घरेलु वायदा चांदी 5 प्रतिशत की तेज़ी होने के साथ इसके भाव 73500 रुपय प्रति किलो पर रहे।

तकनिकी विश्लेषण

सोने के भाव इस सप्ताह सीमित दायरे मे रह सकते है, इसमें 49900 रुपय पर प्रतिरोध और 47800 रुपय पर सपोर्ट है। मार्च वायदा चांदी के भाव मे इस सप्ताह तेज़ी रह सकती है और इसमें, 76000 रुपय पर प्रतिरोध तथा 71500 रुपय पर सपोर्ट है।

Stock market timings play an important role in helping investors to know about the market opening and market closing to ensure easy yet fast transactions. Also, it helps investors to take advantage of stock movements in the market and hence it becomes easier for them to make easy money.

It is important to know that the stock market opening time and stock market closing time vary for different countries in different time zones. Indian stock markets enable investors to trade only during a fixed timing of the day.

There are two major exchanges in the country namely Bombay stock exchange and National Stock Exchange in which the investors can trade through. Now, we will cover the stock market opening and stock marketing closing timings of the leading indices in India BSE and NSE.

Share Market Timings for BSE and NSE:

Pre Open Session:

The pre-opening timings start from 9.00 am and end at 9.15 am. The session is also known as order entry session. Here, investors can buy or sell any securities during this time.

The session is classified into three sub-sessions.

9.00 am - 9.08 am - This session is also known as order entry sessions where orders for any transactions can be placed. In other words, you can easily place the orders for transactions of any stock. Moreover, you can also modify or cancel orders during the time.

9.08 am - 9.12 am - The segment is used for price determination of security as it is used to calculate the opening price of the regular session. Also, this session is used for matching orders as it is done by corresponding demand and supply prices to ensure accurate transactions among investors who want to purchase or sell a security.

Price matching orders help investors in determining the price at which security is transacted during the Indian stock market timings.

9.12 am - 9.15 am - This session is used as a transition period between the pre-opening session and normal Indian share market timings. Also, no such transactions can be placed during this time.

Normal Session

This is the fundamental Indian share market timing that lasts from 9.15 am to 3.30 pm. Transactions processed during this time follow a bilateral order matching system, whereas price determination is done through demand and supply. Bilateral order machine systems are highly volatile in nature and hence there are multiple market fluctuations which can be reflected at any time in security prices.

Continuous Trading Session

This is one of the busiest sessions as in this trading session, mostly buying and selling of shares takes place. Hence, it is also known as primary share market timings. The continuous trading session starts from 9.15 am and ends at 3.30 pm. During this period, trades continue as orders match at time priority.

There are few things, which investors need to consider while trading during the session:

The closing price of the stock is measured as the weighted average of the stock prices between 3.00 - 3.30 pm. The closing price for BSE and NSE is calculated as the weighted average of the stock for the last 30 minutes or between 3.00 pm -3.30 pm.

Post Closing Session

The stock market timing in India is marked at 3.30 pm. It is held between 3.30 pm to 04.00 pm. During this time period, you are allowed to bid for the following day’s trade. If there are enough buyers and sellers, bids placed during this period are confirmed. It should be noted that the bids placed during 3.30 pm - 4.00 pm are not affected by the opening price of the stock market. Hence, if the closing price exceeds the opening price, then bids can be cancelled by the investors.

After Market Order (AMO)

AMO in which you can place orders to buy or sell the stock for the next trading day. This is apt for investors who are unable to monitor the market during the opening and trading session.

The overall stock market timings in India can be described as follow:

S.NoNameTime1Pre-opening 9.00 am -9.15 am2Normal Session9.15 am - 3.30 pm3Closing Session3.30 pm - 4.00 pm

How Can You Invest in the Stock Market?

Needless to say, the stock market is a great place where investors can grow their wealth. Strategic trading on the stock market can help you increase your income, also well-managed trading helps you to get constant returns which can be more than your income.

Investing can be a great way to grow your money, but it comes with risks. One way to manage those risks is by diversifying your portfolio. But what does that mean, and why is it important? Let’s break it down.

What Is Diversification?

Diversification means spreading your investments across different types of assets. Instead of putting all your money into one stock or investment, you invest in various stocks, bonds, real estate, or other assets. This way, if one investment doesn’t perform well, you have others that might do better.

Why Is Diversification Important?

1. Reduces Risk

The main reason to diversify is to reduce risk. If you invest all your money in one stock and that company faces trouble, you could lose a lot of money. However, if you have a mix of investments and one does poorly, the others may still perform well. This can help protect your overall investment.

2. Smoother Returns

Investing is often unpredictable. Some investments may perform well at certain times, while others may struggle. By diversifying, you can achieve more stable returns over time. When one investment is down, another might be up, balancing things out and leading to less volatility in your portfolio.

3. Takes Advantage of Opportunities

Different assets perform better in different market conditions. For example, during a booming economy, stocks may rise, while during a recession, bonds may offer more stability. By diversifying, you can take advantage of opportunities in various markets, increasing your chances of earning a profit.

4. Enhances Potential Returns

While diversification helps manage risk, it can also enhance your potential returns. By including different types of assets in your portfolio, you can access various growth opportunities. For example, if you invest in stocks, bonds, and real estate, you might find that some of these assets provide strong returns at different times.

5. Protects Against Market Changes

The market can change quickly due to economic shifts, political events, or changes in consumer behavior. By diversifying your portfolio, you can protect yourself against sudden market changes. If one sector is hit hard, having investments in other sectors can help cushion the blow.

6. Long-Term Strategy

Diversification is a key part of a long-term investment strategy. It encourages you to think about your investments holistically rather than focusing on individual stocks or assets. This approach can lead to better decision-making and ultimately help you achieve your financial goals over time.

How to Diversify Your Portfolio

Now that you understand why diversification is important, here are some tips on how to do it:

1. Invest in Different Asset Classes

Consider investing in a mix of asset classes like stocks, bonds, mutual funds, and real estate. Each asset class behaves differently in various market conditions.

2. Choose Various Sectors

Within the stock portion of your portfolio, invest in different sectors such as technology, healthcare, finance, and consumer goods. This way, you’re not relying on one sector to drive your returns.

3. Include International Investments

Look beyond your local market. Investing in international stocks and funds can provide additional opportunities and reduce your reliance on your home country's economy.

4. Consider Different Investment Styles

Mix growth and value investments. Growth stocks may offer higher potential returns, while value stocks can be more stable and provide dividends.

5. Regularly Review and Adjust

Your investment needs and market conditions will change over time. Regularly review your portfolio to ensure you maintain a good balance and make adjustments as necessary.

Conclusion

Diversifying your portfolio is a crucial strategy for managing risk and enhancing potential returns. By spreading your investments across different asset classes, sectors, and regions, you can protect yourself against market fluctuations and take advantage of various growth opportunities. Remember, the goal is to create a well-rounded portfolio that aligns with your financial goals and risk tolerance. Taking the time to diversify can lead to more stable and successful investing in the long run.

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Union Budget 2021-2022

Govt. will combine SEBI Act, 1992, Depositories Act, 1996 and SCRA into a solitary Securities Market Code which should upgrade administration and lessen consistence.

Govt expanded FDI rate in the Insurance area from 49% to 74% however with controls and defends. This opens up the insurance area for Mergers and Acquisition.

For gold trade, SEBI will go about as a controller, seems as though somebody will begin staying at work past 40 hours

Govt proposes to strip two PSU banks and one General Insurance Co., Divestment Target for FY22 set at Rs. 1.75 lakh crore. Govt resemble - Paisa he paisa hoga!

Help to senior residents Age 75 or more getting just pension and interest pay are not needed to document ITR. Presently they can live sukkon ki zindagi!

No adjustments in Tax section by any stretch of the imagination - Budget ka principle kaam toh bhul hi Gaye!

Threshold exclusion limit for an assessment review, with advanced exchanges, expanded from 5 cr to 10 cr. CA's resemble ab hamari audit income bhi kha jao!

Monetary Deficit ascends to 9.5% of GDP. Arey! Isko kam krna hota hai.

Petroleum aur Diesel cost hi increment krna tha toh financial plan kyun rakh liya.

We have noticed many regulatory changes in the mutual fund industry in the upcoming year, which is about to end soon. In an attempt to make mutual funds more transparent for traders and investors, SEBI came up with some changes which will remain applicable in the new year 2021.

Here is a list of changes that will come into effect in Jan 2021.

1. Changes in portfolio allocation rules for multi-cap funds:

SEBI announced portfolio allocation rules for multi-cap mutual fund schemes. As per the new rules made by SEBI, a mutual fund scheme will have to invest at least 75% in equities and equity-related investments. In addition to this, the schemes will have to invest in a minimum of 25% each in small-cap, mid-cap and large-cap stocks. At present, there is no such restriction allocation and therefore fund managers are allowed to invest in the mid-cap as per their own choice.

All mutual fund houses were given time till 31 January 2021, to comply with the fresh rules, within the one month from the date of publishing the next lists of stocks by AMFI. Following concern in the industry, the SEBI later introduced a new mutual fund category called flex cap fund, which is required to invest at 65% of the corpus in equity without any restrictions on investing in small-cap, mid-cap or large-cap funds. Some AMCs have already reclassified their multi-cap schemes as Flexi cap category to avoid any portfolio changes.

2. Changes in NAV Calculation

From January 1, 2021, mutual fund investors will get the purchase NAV of the day, when investors’ money reaches the AMC, irrespective of the size of investments. This NAV rule will be applicable only for those funds which are available for utilization irrespective of the name and size of the application.

Under the prevailing rules, the NAV of the date of purchase is considered for the purchase of less than Rs 2 lakh, even if the money does not reach the AMC, but the order is placed within the cut off time.

3. Inter Scheme Transfer of Securities

According to the sources, inter scheme transfer (IST) of debt papers can only be done within 3 business days of the allotment of the schemes’ units and after three business days, such transfer will not be allowed. Under prevailing rules, SEBI only requires that such IST be done at the market prices.

From January 1, 2021, inter scheme transfer in closed-ended funds can be done within 3 business days as the scheme transfers involve shifting of debt papers from one mutual fund scheme to another.

Moreover, SEBI also specified that such ISTs be done only at the market places and no ISTs shall be allowed if there is any negative market news or rumours in the mainstream media.

4. Renaming the dividend option

From April 1, 2021, mutual fund schemes comprising all the dividend schemes will be renamed as income distribution cum capital withdrawal options.

5.New Riskometer Tool

SEBI introduces a new category of mutual fund schemes on its riskometer tool for investors to make better decisions with high-risk mutual funds. Earlier, the model was simply based on the risk of the category without considering its actual portfolio. The new riskometer shall be evaluated every month and all schemes will be labelled for risks and funds.

Additional Measures Under Consideration

SEBI is considering additional measures which are expected to be implemented with the mutual fund industry. Here are some of them:

• It is mandatory to maintain a minimum 10% exposure in liquid assets such as government securities, treasury bills, and cash in hand.
• Gating of redemption during extreme events to prevent any pressure on the fund.
• Do assessment whether the side pocket creation norms need to be revised.
• Stress testing for all open-ended debt oriented mutual fund schemes will raise early warning signs and enable AMCs to take necessary actions.
• Encourage repo in corporate bonds to raise liquidity in the secondary market and to enable greater issuance of paper rated below AAA.