India to start taxing capital gains to Singapore investors from 01st April,2017

Dear Reader,

Now, India will start imposing capital gains tax on investments coming from Singapore from 01st April 2017 and fully withdraw exemptions in two years as the two countries agreed to amend a decade-old treaty after New Delhi rolled back similar concessions to Mauritius and Cyprus earlier this year.

With the amendments, announced by Finance Minister Arun Jaitley on today(30th December,2016), investors based in Singapore will no longer benefit from tax exemptions on capital gains taxes.

Changes to the treaty with the Asian financial centre had been widely expected after India this year similarly re-drafted a 33-year old tax treaty with Mauritius.

The tax treaty between India and Singapore had a provision that any changes in the Mauritius treaty would automatically apply to the one with the Asian country.
The move to tighten tax treaties is part of Prime Minister Narendra Modi's anti-corruption drive, which includes tightening loopholes for firms or rich individuals setting up a presence in jurisdictions with tax exemption treaties.

Regulators have long suspected rich Indians were routing cash through these tax jurisdictions, and channeling money back to India in a practice known as "round tripping".
"We are able to give a reasonable burial to this black money route," Jaitley told reporters at a news briefing.

Capital gains tax will be imposed on investments from Singapore that are made from April onwards. The tax rate will be half the prevailing Indian rate for the next two years and rates will then be equated by April 2019. Jaitley said.

Singapore has been an increasingly popular source of foreign investment into India.
Foreign direct investment flows from Singapore stood at $50.6 billion between April 2000 and Sept 2016, contributing more than 16 percent to total capital inflows during that period, second only to Mauritius.

The curious case of Bearish Head and Shoulder Pattern on NIFTY 50

The curious case of Bearish Head and Shoulder Pattern on NIFTY 50

NIFTY 50 taking a pounding from the double Ds, the reason for a sleepless night for fund managers? Let's find out.

Demonetization and Dollar Strength: The surprise move of currency ban of Old Rs 500 and Rs 1000 notes has affected the Indian consumer to refrain from spending in the absence of adequate cash in the system, causing another year of disappointment of earning revival for fund managers it won’t be wrong to considered a strong reason to grow impatience for DIIs to throw in the towel.

FIIs the largest yet panicking shareholder group in India, the sell-off in the emerging market due to FED rate hike seemed like an excuse to run back to green back, shocked FIIs accelerated the withdrawal of funds and pulled the maximum amount from Indian Asset classes on concerns of India’s Consumption Economy slowdown.

The above events are very clearly visible on the Weekly Charts of NIFTY 50 showing markets are preparing for lower levels, The index has shaped up a prominent bearish technical pattern; head and shoulders with the critical neckline support near 7910-7920, In the event of maturity of pattern NIFTY, could crash down to Feb’16 lows of 6800-6900 which was tandem in the free fall of global market due to sudden Chinese Yuan Devaluation tantrum.

Look at NIFTY WEEKLY CHART below.

So, WHY exactly this is so crucial the correction of 10% from here and the fact the head and shoulders bearish patterns can’t change the fundamentals of India’s phenomenal growth potential story, some analyst might welcome it is a healthy correction in bull market, I could have agreed only if Charts were not showing a serious concern for markets. NIFTY monthly chart indicates a free fall below sub 7000 levels now will violate the 2009 onwards intact bull market trend, the multi-year this curious Head and Shoulders Bearish pattern needs to be cautiously played in the market if it breaks the crucial levels. We may see a long term trend reversal and hence a bear market.

So really will this actually materialise? I say we will find out.

NIFTY Monthly Chart.

NSE-INDEX OUTLOOK – 02 December, 2016

For educational purpose only, please trade after consulting with your advisor.

NIFTY 50: On last trading session we have seen a sharp fall in Nifty. It was mentioned in our previous update that Nifty is in Buy Zone and go Long with strict stop loss.

Now what’s next: NIFTY is still in buy zone but we are expecting that market will see lower levels in the days to come. So it is better to sit set aside or go with hedging the portfolio. We are expecting lower levels in Nifty and Bank Nifty. Yesterday also we have seen a huge upmove in Crude oil and Brent. Further we have also seen fall in Dollar Index.

Support: 8160/8117/8100/8050

Resistance: 8250/8288/8305/8400

For short term, we are having negative view on Oil Marketing Companies, Tyre Company, Paints Companies and Aviation Company. However we have positive view on IT and Pharma Companies. 

NIFTY BANK: On last trading session we have seen a fall in Bank Nifty. It was clearly mentioned in my last update that short term rally not ruled out but go with strict stop loss. Further it was also mentioned that for entering into negative zone, we need a closing below 18573 and we have seen 18428.

Now what’s next: Now Bank Nifty enter into Sell Zone. Further Bank Nifty is now trading  below its short term moving average but above long term moving average. Now 18180 to 18130 is the key level to watch in Bank Nifty Spot. If the breach, we may see sharp fall till 17500. If that happen then bank nifty will trade its long term moving average.

Support: 18325/18265/18185/18000

Resistance: 18535/18695/18785/18886

NSE-INDEX OUTLOOK – 01 December, 2016

For educational purpose only, please trade after consulting with your advisor.

NIFTY 50: On last trading session we have seen a huge gain of 82.35points (+1.01%). As mentioned in our previous update that Nifty is in Buy Zone and go Long with the Target of 8200 and 8220 and happy to share that Nifty meet our levels and close at 8224.50.

Now what’s next: NIFTY is in buy zone as that is trading above its short term as well as long term moving average, we suggest you to go long with strict stop loss. NIFTY will enter into Sell zone if it closes below 8133.85, rally may continue in Nifty with immediate resistance to the up move at 8250/8296 .Yesterday we saw a sharp surge in CRUDE OIL  as OPEC reached agreement on output free by 1.2 mbpd starting Jan 1, 2017. A moderate Oil price is sustainable our economy have sufficient forex reserve for any external shock. On last trading session FIIs were net sellers of Rs.434.42 Crores while DIIs were net buyers of Rs. 676.68 in Capital markets. Nifty would see strong support at 8200/8161/8150/7997/7975. And resistance at 8250/8288/8296/8305.

For short term, we are having negative view on Oil Marketing Companies, Tyre Company, Paints Companies and Aviation Company. However we have positive view on IT and Pharma Companies.  

NIFTY BANK: On last trading session we have seen a huge gain of 404.05 points (+2.22%). It was clearly mentioned in my last update that short term rally not ruled out. Further it was also mentioned that for entering into positive zone, we need a closing above 18559. We have seen a closing at 18627.

Now what’s next: Now Bank Nifty enter into buy Zone. Further Bank Nifty is now trading above its short term as well as long term moving averages. Now go long in Bank Nifty but with strict stop loss. As today is expiry of weekly contract, so we are expecting huge volatility. Bank nifty will enter into sell zone if it close below 18573.

Support: 18585/18503/18436/18325

Resistance: 18690/18780/18880/19010

NSE-INDEX OUTLOOK – 30 November, 2016

For educational purpose only, please trade after consulting with your advisor.

NIFTY 50: On last trading session we have seen a flat gain of 15.25points (+0.19%). As predicted NIFTY faced a resistance near 8200 level, NIFTY closed flat after reaching the intraday high of 8197.35. We believe that NIFTY will enter into sell zone if it closes below 8119. However the overall sentiment remains NEGATIVE as market is trading below long term average. Go long with caution target remains for 8200 and 8220.

Now what’s next: As predicted by us yesterday the resistance to Nifty remains at up move of 8200 the Nifty faced resistance with Intraday high of 8197. NIFTY is in buy zone we suggest you to go long with stop loss at 8090,rally may continue in Nifty with strong resistance to the up move at 8154/8161/8188/8205/8250/8296.Yesterday we saw a sharp correction in CRUDE OIL as IRAN rules out production cuts , OPEC struggles to reach agreement on output curb on already suffering oil rout. A lower oil price is positive for NIFTY. On last trading session FIIs were net sellers of Rs.715.30Crores and DIIs were net buyers of Rs. 534.20 in Capital markets. Nifty would see strong support at 8100/8064/7990/7950/7935/7897/7800/7777.

NIFTY BANK:On last trading session we have seen a minor loss of 77.70 points (-0.4%) as updated in our previous update the NIFTY BANK is in negative zone and every up move is the opportunity to sell . We are expecting a bounce back on NIFTY BANK however overall sentiment is weak.

Now what’s next: Our view is still same i.e. sell on rallies. We expecting bank nifty to trade below is long term moving average in the coming day.

If today NIFTY BANK Closes above 18559 then NIFTY BANK will enter into BUY ZONE.

The support for NIFTY BANK is at 18140/18050/17980/17720 and resistance to the up move is at 18540/18690/18780.

NSE-INDEX OUTLOOK – 29 November, 2016

For educational purpose only, please trade after consulting with your advisor.NIFTY 50: On last trading session we have seen a flat gain of 12.60 points (+0.16%) as mentioned in our yesterday’s outlook on Nifty where we mentioned that the NIFTY has entered into the buying zone. It closed above the crucial levels of 8090 however the Index is still trading below Long Term Moving Average due to which overall market sentiment remains negative. We suggest you to go cautious with Long positions.
Now what’s next: Nifty is in buy zone. we suggest you to go long with stop loss at 8090 for the target of 8200 and 8220. This rally may continue in Nifty with strong resistance lying at higher levels. Going through the week the investor look for a hectic week of data from Global cues,  it is unlikely that traders will go short on USD going into the week as decent jobs report expected on street, Italian Referendum and Presidential Elections in Austria will surely imply volatility in markets. On last trading session FIIs were net sellers of Rs.1436.40Crores and DIIs were net buyers of Rs. 1233.79 in Capital markets.
Support: 8100/8064/7990/7950/7935/7897/7800/7777.Resistance: 8154/8161/8188/8205/8250/8296If today Nifty closed below 8103, then Nifty will enter into sell Zone.

NIFTY BANK: On last trading session we have seen a moderate loss of 205.85 points (-1.1%) as updated in our previous update the NIFTY BANK is in negative zone.
Now what’s next: After yesterday fall, now we are expecting short term bounce back in Bank Nifty but overall sentiment is weak. Every up move in Bank Nifty is a opportunity to sell. The overall sentiment for Bank Nifty is week.
Support: 18140/18050/17980/17720Resistance: 18540/18690/18780If today Nifty Bank closed above 18643.50, then Nifty Bank will enter into Buy Zone.

NSE-INDEX OUTLOOK – 28 November, 2016

NSE-INDEX OUTLOOK – 28 November, 2016

For educational purpose only, please trade after consulting with your advisor.

NIFTY 50: On last trading session we have seen a gain of 148.80 points (+1.9%)  and closing at 8114.30. Now Nifty has entered into the buying zone as it closed above its short term moving average. However this trend is still subdued at Index is trading below its Long term Moving Average.

 Now what’s next: Nifty saw a sharp rally on Friday and entered into buying zone but we are expecting this rally may not continue. We have seen a continuous up move in US Dollar index which we expect is negative for this market.  A big Interest Rate cut by RBI can boost the rally.

Support: 8064/7990/7950/7935/7897/7800/7777.

Resistance: 8161/8188/8205/8250/8296.

Now, nifty will enter into sell zone if it close below 8097.50.

NIFTY BANK: On last trading session we have seen a moderate gain of 251.2 points (+1.4%) however overall Index looks weak on the charts and it is still is sell zone with negative sentiment. The key thing for consideration is that Nifty is trading above its short term moving average and below its long term moving average. However in the case of bank nifty, the case is opposite. Bank Nifty is trading above its long term moving average however below its short term moving average. So we are expecting that Nifty will come down to align with Bank Nifty.

Over the weekend a great move from RBI to curb excess liquidity from Market by  announcing the CRR hike by 100% . This is negative for banking shares specially PSU Bank as they have to deposit more money with RBI without getting any interest on that. We are expecting Base rate cut from Bank at very high pace, because since they are not getting any Return from RBI on his deposit, then why they will pay you 6%+ interest on FDR.

Support: 18140/18050/17980/17720 Resistance: 18540/18690/18780

On last trading session FIIs were net sellers of Rs. 372.88 Cr and DIIs were net buyers of Rs. 997.84 Cr in Capital markets.

We believe the rally in NIFTY will be supported by NIFTY IT and NIFTY Pharma.

RBI Move to drain excess liquidity from system and its impact

RBI Move to drain excess liquidity from system

With a move to absorb the excess liquidity due to Demonitisation, RBI by its notification(annexed below)direct banks to increase its CRR( Cash Reserve ratio) by 100% of Net Demand and Time Liabilities(NDTL).

On the increase between September 16,2016 to November 11,2016, scheduled banks should maintain an incremental CRR of 100 percent, effective the fortnight beginning from November 26, 2016.

The RBI will review this move on December 9, 2016 or even earlier.

The Reserve Bank has also separately revived the Guarantee Scheme to enable deposit of SBN(Specified Banking Notes)balances at the Reserve Bank or at currency chests and get immediate value. This measure should also facilitate banks’ compliance with the incremental CRR.

How this move will Impact:

RBI came with a measure to suck out liquidity from banks. There has been huge deposits in banking system which is likely to gain further momentum. There is a limitation of total sterilisation by RBI which is around 7 lakh crore in reverse repo. This is a short term measure and will be reviewed by RBI on December 9,2016 or even earlier.

This temporary CRR hike is expected to take around 3.3 lakh crore of banking liquidity out. We think system is sitting on near 7 lakh crore excess liquidity, thus banking system will remain flush with excess liquidity even after this move. This move actually helps RBI to manage liquidity in absence of which overnight markets would have gotten completely dislocated .

It hurts banks as on such a large amount (3.3 lakh crore), banks don't get paid. It has some unique consequences on rates. Banks are likely to reduce fixed deposit rates even more sharply (because they earn zero on all incremental deposits, so why should they pay even 6% on 1 year FD, is how they will think) and thus it's likely that investors chase non-bank saving instruments even more. 

What happens to rates? It's likely that first order impact of this move is negative as some participants may read it a standard CRR hike. After this move we are expecting a Surge in Bond Yield and fall in Banking and reality stock mainly PSU Bank Stock.

Demonitisation has opened up space for steep rate cuts. We are expecting situation of disinflation and fall in GDP mainly in November and December 2016 due to liquidity crunch.


Below is the link for RBI Notification:
https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10744

Save Tax Through ELSS Way! Franklin India Taxshield is winning combination

It’s around this time that most of us begin to think about tax planning. Among the options allowed under Section 80C deductions,Franklin India Taxshield is a good one. An ELSS fund, Franklin India Taxshield invests in equity, and has a three-year lock-in period from the date of investment. The majority of its portfolio is in stable large-cap stocks, making it a good fit for any kind of investor. It is a winning combination of low volatility, near-perfect consistency in beating its benchmark over the long term, and superior returns.

Evergreen performer

Franklin India Taxshield puts around three-quarters of its portfolio in large-cap stocks (stocks whose market capitalisation is above Rs 20,000 crore). Most ELSS funds have lower large-cap exposures. By virtue of this large-cap slant and its valuation-rooted, quality-conscious investment style, Franklin India Taxshield contains losses better than most in correcting markets. In the 2008 crash, for example, Franklin India Taxshield 56 per cent drop was below the average of 62 per cent for the ELSS category and even the 59 per cent average loss large-cap funds delivered.

Of course, this strategy limits gains when markets take off. The fund still does deliver above-average returns during market upswings. But peers such as Reliance Tax Saver, Axis Long Term Equity and Birla Sun Life Tax Relief 96, deliver higher bull-market returns–the three funds, for instance, clocked gains of 165 percent, 133 per cent and 117 per cent, respectively, in the 2013-2015 bull run against Franklin India Taxshield 106 per cent.

But these funds are more volatile; though they rise more, they fall more.  Reliance Tax Saver , for example, dropped 29 per cent in the correcting 2011 market, Birla Sun Life Tax Relief 96 lost 33 per cent while Franklin India Taxshield lost 17 per cent; this pattern repeats in other correcting market cycles too. At the same time, the fund is also able to deliver superior risk-adjusted returns, measured by the Sharpe ratio. In fact, Franklin India Taxshield has among the lowest volatility and the highest Sharpe among ELSS funds.

On consistency too, the fund does well. While the fund goes through short periods where it can underperform its category or benchmark, it usually recovers quickly. It has beaten the category average a high 97 per cent of the time when rolling 3-year returns over the past ten years. Against its benchmark, the Nifty 500 index, Franklin India Taxshield is similarly good. Since its inception, the fund has done better than the index 97 per cent of the time, when rolling 3-year returns. Barring Axis Long Term Equity Franklin India Taxshield has among the best records of consistency in beating both category and benchmark.

In the one, three, and five-year periods, Franklin India Taxshield returns are in the mid-quartile. This is partly due to the comparatively lower mid-cap and small-cap holding at a time when these two segments have been indefatigably marching higher. Another reason is its sector shift and stock choices.

Portfolio change

Franklin India Taxshield takes a long-term perspective on its stocks, tending towards a buy-and-hold approach. It considers stock valuations in light of long-term growth prospects, and tends towards companies with high corporate governance and quality.

Given the promise in economic growth and recovery, the fund has significantly increased holding in banking. The sector now accounts for 32 per cent of the portfolio, up from the 26 per cent six months ago. It still holds mostly private sector banks here; Axis Bank is one stock where the fund has increased holding and which has recently seen sharp corrections. Automobiles is the second sector where the fund has increased stake; here too, the fund has upped share in Mahindra & Mahindra, which can benefit from both a rural and urban recovery, and Maruti Suzuki.

The fund hasn’t moved much into other recovery-driven but troubled sectors such as metals, construction, infrastructure, engineering, or energy; these sectors form very small shares in the overall portfolio, even as peer funds hold these. This is also a contributing factor to Franklin India Taxshield short-term underperformance compared to peers as these sectors have run up sharply in the past six months. Significant exposure is limited to cement, where demand as well as company fundamentals are far more robust. As with most funds, Franklin India Taxshield has cut holdings in the software sector, though the sector is still near the top. Telecom holdings are also down.

Still, the fund’s portfolio holds a balance between cyclical, defensive, and consumer themes that can hold it in good stead. The fund is managed by R Janakiraman and Lakshmikanth Reddy, and has an AUM of Rs. 2392 crore.

Nifty Weekly Outlook(07-11 November, 2016)

For Educational Purpose

Nifty Close the Week with a lose of almost 2.40%

Now What's Next:

Now Nifty is at very critical level. It is make or break position for Nifty. 

Immediate Support for Nifty lying at 8398. Once that level Breach then next support lying at 8337. But if this level also break then deep fall expected in Nifty which might extend to 8000 to 8100. .

Immediate Resistance for the Nifty Lying at 8500 to 8550. If the index manages to close above these levels then the index can move to the levels of 8650 to 8700.

Next week is expected to be highly volatile due to Global Event .

BANK NIFTY WEEKLY OUTLOOK (07-11 NOV,2016)

For Educational Purpose Only.

Nifty Bank ended the last week on week note.

Now What's Next:

Support for the index lies Between of 19000 to 19100 where Short term Moving Average are lying. If the index manages to close below these levels then the index might see levels of 18500 where the index has formed a base in July – 2016 and August – 2016. If the index breaks below these levels, then the index will see further fall which might be till 18050 to 18200 .

Resistance for the index lies between 19400 to 19500 where the index has formed a gap on 02/11/2016. Resistance for the index lies in the zone of 19700 to 19800 from where the index has broken down. If index moves above these levels, then we might see levels of 20,000 in Bank Nifty.Range for the week is seen from 18200 to 18300 on downside to 19400 to 19500 on upside.Once index moves above these levels, then we may see fresh rally in Bank Nifty which might help Bank Nifty to see level 20200.

Sun Pharma Share Outlook

View on Sun pharma

For Educational Purpose Only

The stock closed the last week by losing around 13%.

Now What's Next:

The stock have strong support between 635 to 651. We are expecting the stock will hold these levels and see some bounce back. If these Level Breach then Next Target will be around 593. 

Short term Resistance lying at 710. Once that Breach then we may see a level of 730.