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Explained: All you want to know about the RBI’s RDS scheme for retail investors

by 5paisa Research Team 16/11/2021

Last week, Prime Minister Narendra Modi inaugurated the so-called Retail Direct Scheme (RDS) of the Reserve Bank of India (RBI) which allows retail investors to invest in government securities, or G-secs. 

The new scheme will let common people invest in G-Secs by directly opening an account with the RBI. This can be done via a new platform called the RBI-RD, which the central bank has launched. 

What sort of securities will the new platform allow people to invest in?

The RBI-RD platform will let people invest and trade in government of India treasury bills (T-bills), government of India dated securities, sovereign gold bonds and state development loans. 

What is the USP of the new scheme? 

The scheme not only offers a simple and easy process to invest in G-Secs, but also puts India in an exclusive club of nations that actually allow democratisation of government debt.

Until now, government paper has been accessible only to financial institutions which trade and invest in high volumes and have extremely high minimum threshold limits of investment.  

So, how can a retail investor actually invest in G-Secs via the new scheme?

To invest in G-Secs, a retail investor needs to open a Gilt account on the RBI-RD portal. This portal also allows people to bid in primary auctions and trade securities in the secondary market. 

How much would the new scheme cost an investor? How can money be remitted?

The new scheme allows people to invest free of charge. Customers can pay for buying G-Secs via internet banking and UPI. 

Will investors get a helpline?

Yes, investors can avail of support via the online portal, on email and on phone. 

But couldn’t small retail investors access G-Secs before this scheme came into vogue?

They could, but not directly. Such securities could only be bought via gilt mutual funds or G-Sec dealers, who participated in the central bank’s primary market auction every Friday. Moreover, existing securities could be traded on the National Stock Exchange and the Bombay Stock Exchange. 

How could the RBI attract more people to avail of the new scheme?

Experts say that one way of attracting new people to participate in the new scheme is by offering tax sops. This, they say could also attract global fintech companies who would want to provide such services in India. 

“If retail taxation of direct debt investments is brought in line with investing through debt funds, we should see some retail interest emerging,” a report by The Economic Times newspaper cited Ananth Narayan, associate professor at SP Jain Institute of Management and Research as saying.

“This could, in turn, attract intermediaries including global and local fintech companies. Also currently, small savings schemes offer much higher rates than GoI securities,” Narayan said.

What are the key challenges facing the new scheme?

For one, retail investors are unaware of G-Secs and how they work, and how investing in such instruments could be beneficial for them. Investors are also not aware of which type of G-Sec they should choose. This is especially true for high-income investors, as the interest on these instruments is fully taxable, as against debt funds like corporate bond funds and gilt funds where an investor can take the benefit of lower tax rates and indexation.  

Another possible problem could be low liquidity, which could hamper trades. The central bank may need to infuse some much-needed liquidity into these instruments, which are otherwise some of the safest vehicles for parking money and taking out steady returns over long periods of time. 

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Stock in focus: Why is TV Today Network attracting the attention of market participants?

Stock in focus: Why is TV Today Network attracting the attention of market participants?
by 5paisa Research Team 16/11/2021

A high growth media company, TV Today Network is posting good profits every year.

TV Today Network Limited is a media and entertainment company engaged in television programming, radio broadcasting and broadcasting activities This media company has a market cap of Rs 2305 crore and is a high growth company posting good profits every year. In the last five years, revenue has grown yearly at 15.72% vs the industry average of 8.85%. This certainly shows that the company is on the right track with its business performance and is quite evident with its movement in the stock price. Major stake of the company has been held with its promoters (58.45%) while the FII hold 6%. Around 20% of the portion is held by retail investors.

The stock has performed exceptionally well by delivering a whopping 70.11% returns YTD while its three-month performance stands at 28.86%. This shows that the stock is performing strongly for quite some time. The company recently posted its quarterly results which were good and the company management expects better performance in times to come.

The stock has been consolidating for many months until the last week, where it recorded a resolute breakout of stage-2 cup pattern and thereafter, it is seen moving northwards. The volumes have risen since the previous week indicating larger participation in the direction of the trend. The stock is trading above all key moving averages and the RSI, too, is going strong at 85. The positive directional movement (+DMI) is well above the -DMI and the difference is consistently increasing, which shows strong trend strength in the stock. The share price has zoomed by 12% in today’s trading session and is currently trading at its 52-week high.

With increasing volume and the strength, it possesses, we might see the stock testing levels of Rs 500 in times to come, as it is the measuring implication of the cup pattern breakout. The stock looks technically strong on all fronts and fundamentally sound. TV Today Network is certainly an attractive bet and traders shouldn’t miss the opportunity in this stock.

 

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MF Update: October 2021 AUM stands at Rs 36.68 lakh crore

MF Update: October 2021 AUM stands at Rs 36.68 lakh crore
by 5paisa Research Team 16/11/2021

Domestic mutual fund AUM has remained at almost the same level for the last two months.


The asset under management (AUM) of the domestic mutual fund industry has declined by 0.14 % on monthly basis to Rs 36.68 lakh crore for the month of October 2021. Debt dedicated fund for the month of October 2021, saw net inflows to the tune of Rs 12,984.8 crore after witnessing an outflow of Rs 63,910 crore in the preceding month. Overnight fund and floater funds saw a major inflow in the month of October 2021 while liquid funds and short duration funds saw net outflows in October 2021.

Hybrid funds saw an increase of 2.76% in their AUM on a sequential basis in October 2021. Hybrid funds saw net inflows to the tune of Rs 10,437.11 crore and within hybrid funds, it was Dynamic Asset Allocation/Balanced Advantage Fund that saw major inflows to the tune of Rs 11,219 crore. Passively managed funds such as ETF and index funds continued to see good traction and for the month of October 2021, and saw net inflows of Rs 10,758.85 crore.

For equity-oriented schemes, AUM increased by 1.32% on the month on month basis. All the categories of equity MF saw an inflow except for the ELSS and value fund. The net inflow has increased to Rs 5214 crore in October 2021 compared to an inflow of Rs 8677 crore in the month of September 2021. At the end of October 2021, the total AUM of equity-oriented funds was at Rs 12.96 lakh crore compared to Rs 12.79 lakh crore at the end of September 2021.

Particulars (Rs Cr)  

Sep-21  

Oct-21  

Change  

Total AUM  

36,73,893.13  

36,68,933.28  

-0.14%  

Equity Oriented Schemes  

12,79,647.20  

12,96,559.44  

1.32%  

Debt Oriented Schemes  

14,15,416.61  

14,31,330.07  

1.12%  

Hybrid Schemes  

4,50,165.06  

4,62,611.35  

2.76%  

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Nifty Realty Index outperforms Nifty 50. What is the driving force behind the rally?

Nifty Realty Index outperforms Nifty 50. What is the driving force behind the rally?
by 5paisa Research Team 16/11/2021

Nifty Realty Index has outperformed the Nifty 50 on a YTD basis. Here are the top three stocks of Nifty Realty!

The NIFTY Realty Index is designed to reflect the performance of real estate companies that are primarily engaged in the construction of residential and commercial properties. The rescheduling of index constituents happens bi-annually every year.

Nifty Realty has outperformed Nifty 50 on a YTD basis delivering staggering returns of 74.91% returns as against 29.25% of Nifty 50. The aforementioned performance can be attributed to the fact that the real estate companies are performing exceptionally well in recent times and the government’s supportive policies towards development and infrastructure promote the overall development of the real estate business.

Speaking of Nifty Realty, it has gained a massive 125% year-on-year basis while its three-month performance stands out at 39%. Nifty Realty is above all its key moving averages and RSI is strong at 60. It looks strong on technical factors as it continues to achieve newer highs. Not only Nifty Realty looks strong in short term, but it also has the potential to perform well in longer-term too.

In today’s trading session, the Nifty Realty index is seen trading flat with positive bias despite the fact the markets are reeling under selling pressure.

Nifty Realty constitutes 10 stocks which are Macrotech Developers, Oberoi Realty, Brigade Enterprises, Prestige Estate, DLF, Sunteck Realty, Indiabulls Real Estate, Godrej Properties, Sobha limited and Pheonix Limited. The index heavyweights are DLF and Godrej properties which have a weightage of 25.07% and 23.69% respectively. Some stocks of the realty sector have delivered more than 100% return on a YTD basis and have turned out to be multibagger stocks. They are the main driving force behind Nifty Realty’s stupendous rally. Even the underperforming stocks in the Nifty Realty pack have delivered a mind-boggling return in the range of 40-45 % YTD, which shows that the index, as a whole is extremely bullish.

The three stocks that have turned multibagger on a YTD gaining more than 100% returns:

  • Indiabulls Real Estate- 127.68% 

  • Sobha- 113.25%

  • Brigade Enterprises- 102.73%
     

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Technical analysis: Tata Steel trading near its crucial support level

Technical analysis: Tata Steel trading near its crucial support level
by 5paisa Research Team 16/11/2021

Tata Steel Limited is presently trading near its crucial support level which is also its important Fibonacci level. Read on to find out more.

In the last one and half years, Tata Steel Limited rallied almost 537.54%. It was in August 2021, that the stock took a breather and began to decline. Post making a high of 1,534.5, the stock started moving downwards and generated a negative 20.32% till now. Even the Nifty Metal Index moved into consolidation in July 2021. As it is range-bound consolidation, it is difficult to predict the direction. Tata Steel Ltd has the highest weightage of 23.56% in the Nifty Metal Index.

Moreover, since August 2020 this stock began to underperform Nifty Metal Index. In fact, its Relative Strength (RS) began to fall and is trading below its 9-Day Simple Moving Average (SMA). This shows weakness relative to its benchmark index. The Relative Strength Index (RSI) is presently trading below its 9-Day Exponential Moving Average (EMA) 58.64 at a 50.65 level. Moving Average Convergence and Divergence (MACD) though in the positive territory has shown a negative crossover in the first week of September 2021. The stock is presently heading towards the lower Bollinger band. Looking at Commodity Channel Index (CCI), it is heading towards the oversold zone.

The stock is presently trading near its crucial support level of 1,232.9 and is also near its important Fibonacci level of 23.6% (level of 1,228.8).

So, not it would be quite interesting to see how the stock moves. If it moves ahead and breaches this support level then the stock would likely chase the level of 1,040-1,049. On the upwards, 1,426.55-1,481.8-1,534.5 levels would work as resistance for the stock, breaching would help decide its further direction.

At the time of writing the stock was trading at 1,236.80 levels.

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Cipla makes an entry in S&P Dow Jones Sustainability Index for the Emerging Markets

Cipla makes an entry in S&P Dow Jones Sustainability Index for the Emerging Markets
by 5paisa Research Team 16/11/2021

Unarguably the gold standard for corporate sustainability, the S&P Dow Jones Sustainability Index/DJSI is highly regarded by global investors and financial analysts looking at ESG based investments.

Cipla Limited, a leading pharmaceutical company announced last evening that it has made an entry in the S&P Dow Jones Sustainability Index after getting selected in the DJSI for the Emerging Markets for 2021. This index, for the year 2021, consists of 108 companies from 12 emerging economies, including China, Brazil, South Africa and Taiwan.

Unarguably the gold standard for corporate sustainability, the DJSI is highly regarded by global investors and financial analysts looking at ESG based investments. The index follows a best-in-class approach, by assessing sustainability leaders from each sector on both global as well as regional levels.

Under the selection process, approximately 4000 of the world’s largest and listed companies had to go through a meticulous assessment on Economic & Governance, Social & Environmental parameters, under which, the companies were evaluated for their corporate governance, ethics, risk management, climate change mitigation, stakeholder engagement, access to medicine, quality, corporate social responsibility and human resource practices.

In this assessment, as of 12 November 2021, Cipla performed in the top decile in the pharmaceutical industry and achieved a ranking of 93 percentile. It did so by significantly enhancing its performance in parameters such as strategy to improve access to drugs or products, human capital development, tax strategy and climate strategy compared to last year.

The pharma major aims to reach a non-fossil fuel share of 40% by 2030. For this, it made investments in a group captive open access solar power project of 30 MW capacity in January 2021. This contributed to its decarbonizing goals.

At 1.11 pm, the share price of Cipla Ltd was trading at Rs 932.35, which was a decline of 0.61% from the previous day’s closing price of Rs 938.05 on BSE.

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