SEBI Announces Optional T+1 Settlement From 01-January
Late on 07th September, SEBI announced that it would roll out optional T+1 settlement cycle for stocks from January 2022. Indian stock markets currently operate under T+2 rolling settlements. In this system, if a long or short equity position is taken on any trading day, it has to be either squared up on the same day or it goes into compulsory delivery and gets settled 2 trading days after the trade date (T).
New SEBI T+1 Settlement New Rules
The rolling settlement system was introduced in India in 2001 on the T+3 format and later shifted to T+2 settlements in 2003. At that point, T+1 was discussed but the idea was put off as market participants felt that the banking system was not geared up to handle T+1 settlements. Market participants and infrastructure providers are now of the view that the banking infrastructure has improved substantially to handle this pressure now. Hence, T+1 would improve liquidity and reduce funds lock-in for clients.
Accordingly, SEBI has announced optional rolling settlement in stocks effective from 01-Jan 2022. Stock exchanges will have the discretion to select stocks to offer T+1 settlement cycle on. The only condition is that once the shift is made to T+1, there would be a minimum lock-in period of 6 months and the exchanges will have to provide 1-month advance notice to the members and other clearing institutions for any future shift.
That means; effective Jan-22, there would be T+2 and T+1 settlement cycles happening simultaneously on the stock exchanges. If a stock is moved into T+1, that would apply for normal deals and for block deals. One catch in this shift is that for brokers the T+1 stock positions cannot be netted against the T+2 stock positions.
Indian banking has certainly come a long way since 2003 and handling T+1 settlement should not be a problem. Another view is that shifting to the T+1 cycle will align equity cycles better with the F&O cycle, which is already in T+1. ANMI has raised objections, but it does look like the benefits of T+1 could outweigh the demerits. Of course, the immediate challenges like netting of cycles may have to be addressed.
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5 Stocks to Buy Today: September 8, 2021
Every morning our analysts scan through the markets universe and chose the best momentum stocks to buy today. The stocks are recommended from a wider list of momentum stocks and only the best ones make it to the top 5 list. We also update on the performance of earlier recommendation every morning to help you with your trading journey. Read on to know the momentum stocks to buy today. The average holding period could be between 7-10 days on average.
List of 5 Stocks to Buy Today
1. Dollar Industries (DOLLAR)
Dollar Industries Limited has become one of the leading brands in the hosiery sector with an enviable 15% market share and a significant percentage in textile exports of the total production in the Indian hosiery market. It has also made a noticeable presence across social media and e-commerce platforms. Dollar Industries Limited has extensively penetrated across 29 states in India.
DOLLAR Stock Details for Today:
- Current Market Price: Rs.393
- Stop Loss: Rs. 380
- Target 1: Rs. 410
- Target 2: Rs. 427
- Holding Period: One week
5paisa Recommendation: Very strong volumes in the day makes Dollar Industries one of the top stocks to buy today.
2. Balaji Amines Ltd. (BALAMINES)
Balaji Amines Ltd. is an ISO 9001: 2015 certified company and one of the leading manufacturers of Aliphatic Amines in India. The company is specialised in manufacturing Methylamines, Ethylamines, Derivatives of Specialty Chemicals and Pharma Excipients. They also have facilities for the manufacture of derivatives, which are down stream products for various Pharma/Pesticide industries apart from user specific requirements.
BALAMINES Stock Details for Today:
- Current Market Price: Rs. 4,225
- Stop Loss: Rs. 4,170
- Target: Rs. 4,385
- Holding Period: One week
5paisa Recommendation: Sideways move is expected to end and expected to continue holding the grip, thus making it one of the best stocks to buy today.
3. Tube Investments of India Ltd. (TIINDIA)
Tube Investments of India Limited is a Murugappa Group company that specializes in engineering, bicycles, metal formed products, and chains. Based in Chennai, it was incorporated as TI Cycles of India Limited in 1949, as a joint venture company.
TIINDIA Stock Details for Today:
- Current Market Price: Rs. 1,387
- Stop Loss: Rs. 1,345
- Target: Rs. 1,472
- Holding Period: One week
5paisa Recommendation: Trends suggest a renewed interest in buying today, thus, making TIINDIA feature on today's list of top 5 stocks to buy.
4. APL Apollo (APLAPOLLO)
APL Apollo Tubes Limited is the largest producer of Structural Steel Tubes in India. The company's multi-product offerings include over 1,100 varieties of Pre- Galvanized Tubes, Structural Steel Tubes, Galvanized Tubes, MS Black Pipes and Hollow Sections, making APL Apollo one of the leading branded steel products manufacturers in India.
APL Apollo Stock Details for Today:
- Current Market Price: Rs. 1,765
- Stop Loss: Rs. 1,715
- Target 1: Rs. 1,820
- Target 2: Rs. 1,890
- Holding Period: One Week
5paisa Recommendation: Experts observe a breakout in trends, and the stock is likely to perform well today, thus making to our stock recommendations list.
5. Rallis India (RALLIS)
Rallis is known for its deep understanding of Indian agriculture, sustained contact with farmers, quality agrochemicals, branding and marketing expertise and its strong product portfolio of comprehensive crop care solutions. Agricultural solutions from the company benefit more than five million farmers.
RALLIS Stock Details for Today:
- Current Market Price: Rs. 292
- Stop Loss: Rs. 286
- Target: Rs. 306
- Holding Period: One week buy
5paisa Recommendation: The stock pattern shows recovery, and our experts expect this to perform well today.
Performance of our Previous 'Buy' Stock Calls
As we promised, here's how our previous stock call recommendations have worked.
1. Swing trade IRCTC went up 10% in 1 day
2. Swing trade CANFINHOME went up 7.3% in 1 day
3. Swing trade SUNDRMFAST 3.2% in 1 day
4. BLUEDART went up 4%
5. PNCINFRA is 15% in 4 days
6. Profit of Rs. 17.8k from BTST MPHASIS
Share Market Today
SGX Nifty indicates positive opening for Indian markets. SGX Nifty is at 17,428.00 levels, higher 58.75 points. (Updated at 7:45 AM).
US Market: US markets see profit booking as Dow Jones slips over 260 points while Nasdaq closed flat even as bond yields ended at month highs near 1.37%.
Markets turn cautious after the Friday jobs report suggesting growth momentum may be lagging. US$ also sees a bounce to close @ 92.5.
Asian Market: Asian markets opened mixed with the Japanese 'Nikkei' trading above 30,000 for the 1st time in over 3-months on the back of a change of new Prime Minister who seems to be a popular choice.
Taiwan and South Korean markets have seen some profit booking ahead of quarterly numbers due to large manufacturers.
Outcome of the Telecom Committee Meeting
There were major expectations that the Cabinet Meeting on Telecom on 08 September would be a game changer. However, the meeting started at 11 am on Wednesday but did not discuss any of the contentious issues like relief package for Vodafone, change in methodology of AGR computation, deferral of spectrum fees payment etc. The I&B Minister, Anurag Thakur, merely said that the issue was not discussed.
In a way, it is disappointing for telecom stocks, especially Vodafone Idea. It is struggling with its mounting losses, falling customer base and a huge outstanding liability of Rs.180,000 crore. Most of this is owed to the government in the form of Annual Gross Revenue (AGR) dues and spectrum fees payable.
The last relief for telecom players was when outstanding AGR dues were defrayed over 10 years in equal instalments. Here were some key expectations that telecom companies had from the Cabinet Committee on Telecom.
• There were expectations of rationalization of telecom license fees so as to reduce the prospective burden on telcos.
• It was hoped that the AGR definition would be tweaked to exclude non-telecom revenues sources to give relief to telecom companies.
• Telecom players were expecting a moratorium of another 2 years on AGR pay-outs, but markets are unsure how attractive it would be with interest implications.
• There were hopes that government would intervene to bail-out Vodafone, which is stuck with debt of Rs.180,000 crore and huge accumulated losses that have wiped out their net worth.
• The street was expecting that part of the debts of Vodafone Idea would be converted into equity so that the government becomes a partner in the rescue.
Anurag Thakur has been non-committal on whether this would be taken up for discussion next week. Any worsening of the situation at Vodafone Idea would not only lead to loss of jobs, but also a huge dent on banks that guaranteed most of the statutory payables.
5 Mantras To Know When You Are Saving For A Downpayment
5 Mantras To Know When You Are Saving For A Downpayment
Start Early: Most people start saving only a couple years before they decide that they want to buy a house. The key to making the saving process easier is to start early and allow your savings to grow before you ‘need’ to buy a house. This will allow you to go at a slower pace and save smaller amounts of money each month towards the same and not pressurize you into changing your lifestyle significantly or become a burden.
Budgeting: The first step is to sit down with your income and expenses and figure out in what range you could buy a house and what kind of down payment you could afford. It is essential to go over the expenses that you are currently incurring and see where you could cut down and save money. Set a realistic budget for the future and try to stick to it. Ensure that you put aside a portion of your income towards saving for the down payment each month.
Discipline yourself by automating your savings: If you are not the kind of person that could be disciplined about saving, then consider automating them. Decide how much you would like to save each month and set up an automated transfer of that amount to a savings account at the start of each month or start Systematic Investment Plan (SIP) in a mutual fund scheme of your choice. This will make saving and investing a habit.
Make the most of your savings: Consider maximizing your savings by starting an SIP in an equity mutual fund. Since equities are best if you have an investment time frame of more than 5 years, it is always best that you start this as early as possible. An SIP will not only automate your savings and inculcate discipline, it will also help you reap the benefits of equity investing while smoothening some of the volatility associated with equity markets.
You also have to pay interest: When you are looking to buy a house, the down-payment is not the only thing you need to consider. You also need to consider the monthly instalments that you pay for your home loan. You must ensure that you always have savings in a liquid investment that can take care of at least one year of home loan instalments.
RBI Removes UCO Bank from PCA Framework
In a significant boost for UCO Bank, the RBI has decided to move UCO Bank out of the Prompt Corrective Action (PCA) framework. UCO Bank had been brought under PCA framework in 2017 after its financials showed a lot of stress. Its net NPAs had gone as high as 8.57% and that is a typical basket case for a bank to be put under PCA.
The PCA framework puts severe restrictions on the operations of the bank so as to limit the risk burgeoning. For example, banks under the PCA framework are constrained from expanding their loan books. They are also not allowed to undertake any fresh recruitments nor pay any bonuses to the senior managerial staff. Such banks also face severe restrictions on branch network expansion and are also restricted from paying dividends to shareholders.
The decision to remove UCO Bank from the PCA framework was taken after there was a significant improvement in its financials for the Mar-21 fiscal. In addition, UCO Bank has also given an undertaking to the government that it would meet all the criterial to remain outside the PCA framework.
UCO Bank’s net NPAs have fallen from 8.57% in Mar-17 to 3.94% as of Mar-21. In addition, the capital adequacy ratio at 14.24% was comfortable with 85% accounted for by Tier-1 capital. In the light of these systemic improvements in numbers, RBI has decided to remove UCO Bank from the PCA framework.
Apart from having a positive impact on the stock price, the removal from PCA framework will benefit in other ways too. Now, UCO Bank can once again start to expand its branch network in an aggressive manner. The bank can also pay dividends to shareholders and look for fresh senior talent. UCO Bank has been aggressive in offering one-stop services to customers, like through its recent tie-up with Fisdom for wealth management. Exiting from the PCA should help UCO Bank generate better ROI per customer.
5 Mantras To Know About Fundamental Analysis
5 Mantras To Know About Fundamental Analysis
Intrinsic Value: The main goal of fundamental analysis is to evaluate a company’s financials and arrive at a number that can tell you what each share of the company should be worth. The value of the company divided by the number of outstanding shares is the intrinsic per share value of the company. This price is then compared with the market price of the share to determine if the stock is undervalued or overvalued.
Top-Down vs. Bottom-Up: The top-down approach to investing starts with macro variables such as GDP and economy and works its way down to the company level. Whereas, in Bottom-down investing, analysis is done from the company or sector level.
Quantitative & Qualitative: Fundamental analysis looks primarily at quantitative data such as numbers and company financials. But there is also focus on qualitative data, such as the quality of management, quality of the product or service offered by the company, and other such factors.
Long-term Outlook: Fundamental analysis is generally used to determine investments that are more long term in nature. It allows investors to find companies that are good investments from a value and growth perspective. It is ideal for investors using the buy and hold strategy and for value investors.
Procedure: Fundamental analysis starts with reading the company’s annual reports, understanding its business, and identifying growth factors. Then, it moves on to understanding financial statements like the P&L account, Balance Sheet, and Cash flow statements. Based on this, analysts can assume a growth rate to forecast future earnings. Then these future earnings are discounted back to the present and combined to arrive at the value of the company. Several financial ratios such as P/E, P/S and P/B ratios are calculated and compared to peers, industry average, and the firm’s own historical average to determine whether the prevailing market price is overvaluing or undervaluing the company.