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Mon, 20th February 2017

Anirudh Sethi Report

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Archives of “February 16, 2017” Day

Norway proposes major changes to $900bn sovereign wealth fund

Norway’s government has proposed making the biggest changes to the world’s largest sovereign wealth fund in decades, increasing its risk by investing about $90bn more in stock markets and cutting the amount of oil money it can use in the budget.

The $900bn oil fund should be able to invest 70 per cent of its assets in equities, up from the current 60 per cent, as the centre-right government backed proposals by both the fund itself and an expert group.

The shift, which needs parliamentary approval, would be significant for global markets as the oil fund on average already owns 1.3 per cent of every listed company. The increase in equities would come at the expense of bonds, as the oil fund, which has an investment horizon of a century or more, tries to increase its returns.

European Indices Closed in RED

European stock market close 16 February 2017

If you can call a 0.16% gain “standing out” that is.

  • FTSE -0.4%
  • Cac -0.6%
  • Dax -0.4%
  • Ibex -0.4%
  • FTSE Mib +0.2% (I’ve done them a favour and rounded it up)

European bonds

  • Italy 2.14% -10bp
  • Spain 1.59% -9bp
  • Portugal 3.97% -12bp
  • Germany 0.350% -2bp
  • Greece 7.79% +3bp

Meet The Man Behind The Market’s Relentless Ramp

In an ironic twist of fate, it appears the catalyst for many of the biggest and most incomprehensible market ramps of the last few years is a fund called “Catalyst.” With around $4 billion under management (before the latest collapse), the levered options fund is run by Edward Walczak who “uses options to create a better risk/return profile.”

The Catalyst Hedged Futures Strategy Fund is an open-end fund incorporated in the USA. The objective is capital appreciation and capital preservation in all market conditions. The Fund invests primarily in long and short call and put options on S&P 500 Index futures contracts and in cash and cash equivalents, including high-quality short-term (3 months or less) fixed-income securities. 

A ‘great/lucky’ year in 2008 and solid returns since…

Until recently…

  • 1 Week -14.07%
  • 1 Month -12.61%
  • 3 Months -16.96%
  • YTD -13.56%
  • 1 Year -10.11%
  • 3 Year -1.08%

Not just execution, note ban idea itself was wrong :Rajiv Bajaj

With the adverse impact of note ban continuing to hamper two-wheeler sales, Bajaj Auto Managing Director Rajiv Bajaj on Thursday said the idea of demonetisation was itself “wrong” and it is incorrect to blame only the execution side of it.

“If the solution or the idea is right, it will go like a hot knife through butter…If the idea is not working, for example demonetisation, don’t blame execution. I think your idea itself is wrong,” Bajaj said at the annual Nasscom leadership forum here.

Prime Minister Narendra Modi had on November 8 last year scrapped all the Rs 500 and Rs 1,000 notes, with a view to check the black money.

Massive cash rationing was introduced as the new replacement notes were in short supply. The ban on 86 per cent of the total currency worth Rs 15.55 trillion in circulation impacted economic activity across sectors with the consumption-driven ones being the most affected.

Notably, the two-wheeler sales are yet to recover from the impact of demonetisation and industry data releases over the last two months have been showing a slump. The industry was looking forward to better sales on the back of good monsoon and an acceleration in rural economic growth, which drives consumption.

Rajiv Bajaj takes potshots at Modi’s flagship initiative, says stifling innovation will turn ‘Made in India’ into ‘Mad in India’

Peeved at hurdles being faced by his company to launch its quadri-cycle in India, industrialist Rajiv Bajaj today said stifling of innovation by regulatory agencies will turn `Made in India’ into `Mad in India’, taking potshots at the Centre’s flagship manufacturing initiative. “If your innovation in the country depends on the Government approval or the judicial process, it will not be a case of ‘Made in India’, but ‘Mad in India’. After five years, we are still waiting for permission to sell our four- wheeler in the country,” the Managing Director of Bajaj Auto told a gathering of IT industry executives here. Stating the quadri-cycle is being sold across countries in Europe, Asia and Latin America, Bajaj wondered why a vehicle which is cleaner, fuel-efficient, safer and whose benefits are as “obvious as daylight”, is facing troubles. “This is the only country that has not given us permission to sell this vehicles. Because for some reason it thinks if four-wheeler is worse, let people continue on three- wheeler,” Bajaj said. It can be noted the Pune-based auto major, the largest three-wheeler maker in the world, has faced multiple hurdles in launching the ambitious vehicle in the country. Meanwhile, Bajaj said his company is “anti-car”, and sought to dismiss notions regarding two-wheelers being dangerous, saying it is reckless driving which makes two- wheeler riders most vulnerable.

“We feel people should either walk, cycle or use a two -wheeler. Cars are too big, too fast. they pollute, they congest and kill all of us on two-wheelers. People say two- wheelers are dangerous, My submission is two-wheelers are dangerous only when hit by a car.”

Bajaj announced his company is working on a new solution for urban mobility on the last mile connectivity which is safer and cleaner than the available alternatives, but declined to divulge additional details on the same.