Do You Know? Crypto Bitcoin Moved to Indian Markets

Free image: courtesy pixabay

Cryptocurrency or Bitcoin may be a atypical phraseology for an ordinary Indian citizen but you will be surprised to know that all the authorized exchanges in INDIA have recorded an extraordinary growth in the Cryptocurrency business since March 2020. Any conjecture amongst the investors or the Bankers has been removed by the Supreme court order dated 4th, March 2020, setting aside the circular issued by RBI in April 2018. Though no formal regulatory has been issued by the RBI for explicating the matter, the Banks/Customers/Exchanges have already started conducting the business.

There are pros and cons attributed to this unregulated currency but statements coming from the sources like Bill Gates creates confidence:

“Bitcoin is a technological tour de force.”– Bill Gates.

The founder of Microsoft has a great passion for this currency and already holds a considerable quantity of Bitcoins: https://tradingbeasts.com/featured/cryptocurrency-quotes/

There has been an unprecedented increase in business over the last few months in India. The previous eight months starting from March 2020 till date have witnessed the growth of cryptocurrency business in India by more than 600%. Reportedly, the Indian cryptocurrency business with a monthly turnover of more than 23 million dollars stands at number 2 in Asia and number 6 in the world. Mind-blowing?

Launched in 2009 by an unknown person using the alias Santoshi Nakamato, Bitcoin is the new paperless currency that doesn’t have control by the Govts or Banks. It is a digital currency and you can not touch it with your hand. You can buy anything from hotel booking to furniture through this currency.

ATM’s and other dispensing centers facilitate convenient use of cryptocurrency by the customers in many countries. You can use your smart phone or computer to send or receive money without involvement of any Bank. The technology has brought a revolution in the Financial markets with more and more institutions coming out to provide commercial services to their customers.

Free image courtesy: pixabay

With a limited possibility of mining maximum 21 million of Bitcoins, the persistent demand of Bitcoin results in high volatility in the market. The market data suggests 18.75 million Bitcoins are already in circulation as of today. Big institutional investors have been amassing this coin continuously as the price is gradually moving beyond the reach of retail investors. The price of one Bitcoin has scrambled up from 8000$ to 27000$ within 12 months. That makes one Bitcoin equal to 27000×78= Rs.2079000 (Twenty Lac and seventy-nine thousand). Isn’t it a huge amount for one unit of Bitcoin? However, you can buy a small fraction of Bitcoin also.

Unlike, the currency notes and coins minted and printed by the Governments in the closely guarded printed press, these cryptocurrency coins can be mined by the miners from the convenience of their bed rooms. Highly sophisticated computers are used by the experts through a complicated “Blockchain” process popularly known as Mining. This being a technical and labour intensive exercise requires immense concentration. Anybody sitting at home can mine this currency and earn a value of 6.25 BTC for creating one block. By any standards, Its a huge compensation!!

The cryptocurrency markets are in operation 24x7x365 as the blockchain technology has made this market very competitive now. There are more than 6000 coins trading in the markets through hundreds of authorized cryptocurrency exchanges. Every coin has its distinct value and utility. Some of the most popular and traded coins in the markets are indicated below:

1. Bitcoin: BTC:
2. Etherium: ETH
3. Bitcoin Cash: BCH
4. Ripple: XRP
5. Litecoin: LTC
6. Binance: BNB
7. Cardano: ADA
8. Polkadot: DOT
9. Bitcoin SV: BSV
10. Steller: XLM

Free image courtesy pixabay

There are still many countries that have not regulated this currency for valid reasons and genuine apprehensions. Being a parallel economy without any control of the Central Bank or the Governments, this may land in the hands of terrorists or antinational activists. They have their own perceptions of losing the entire control over the currency and its regulatory authority. Most of the countries don’t want this to happen in their own interests.

From India’s perspective, strange statistics forewarn about the pattern of investors investing or trading in cryptocurrencies. More than 50% of investors in the crypto currency markets in India have an annual income of less than 10 lac.

This being a very risky volatile market with turbulences occurring at regular intervals, you must ensure to be circumspect and discreet in handling the transactions. Any impulsive act can make your money vanish in seconds. You can not approach your Bank or RBI for complaining about any pecuniary loss perpetrated by the swindlers through fishing and other fraudulant modus operandi.

Friends, Stay Safe Stay Connected but keep reading

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

How Gold, Real Estate,Stock Market Moved in 2020

We normally find Gold, Stocks and Real Estate moving in different directions. Loss of one could be a gain for the other. There are certain factors contributing to this peculiar ball game in the investment options. Staying strong and taking the world out of the mayhem caused by the Coronavirus pandemic conditions across the globe, we are fortunate to see the whole economy slowly emerging out of the dark tunnel of uncertainties. Even while the vaccination process has already commenced in a number of countries, corona cases have suddenly shown a soaring curve causing anguish but the economic activities have not stopped. Looks encouraging!! The world has learned how to live with Corona, this unwanted unwelcomed intruder in our life.

Global markets crashed in March 2020 showing no remorse to the small investors but the crippled world somehow managed to keep moving with a few sectors finding the time of their life as the sales turnover zoomed. Lockdowns and confinement of people within the boundary walls of their houses, left them trying various options to remain busy. Whereas, the entertainment and travel-related industries suffered, there was a piece of good news for online platforms, consumers, media, Pharma, and communication industries as the consumption of internet data increased.

The pernicious Corona started its venomous bite in Feb. 2020, as the following images illustrate the sudden impact on Gold and Stock markets in the USA. Dow crashed to 20900 levels after achieving the unprecedented highs of 29000 earlier and gold showed nervousness at $1566 levels on 28th Feb 2020.

Whereas, the Dow Zone has spiraled up to unprecedented 31000 levels, the International Gold @$1566 per ounce in Feb 2020 has consolidated to $1880 levels today after peaking to levels of $2067 during the year 2020.

Photo by Jose Francisco Fernandez Saura on Pexels.com

The Indian markets were no different as the nervousness lit large everywhere. Sudden lockdown forced lakhs of workers with meager belongings on their heads walking hundreds of miles to reach their native villages. It was a heart-burning scenario for the people watching their countrymen subjected to inconvenience in the absence of proper transportation and lack of cohesion between the state and the federal government.

Indian gold prices tumbled due to very low demand from domestic customers. However, Gold prices at Rs.43200 per 10 gm in Feb 20 has also shown prominence by moving up to Rs.49300 per 10 gm as of today after touching the historical highs of 52400 in November 2020.

Moving with the International sentiments, Nifty slipping down to unbelievable levels of 8000 in March 2020 has recovered smartly to unprecedented levels of 14595 as of today. Smart investors have made tons of money by investing at the right time when everyone was exiting the markets in panic and desperation. Nifty 50 trading at around 7600 in March 2020 has doubled the money in less than a year. Your self belief, courage, confidence, preseverance never goes wasted when it comes to investments.

During these turbulent times, we saw the concept of three avenues of investments never going hand in hand as they form parallel lines in the global economies without any exception. The three options of investments being Real Estate, Gold, and Stock Markets. The money keeps oscillating between these three strongest pillars of the economy. The liquidity pushed stock markets higher being the convenient way of entering and exiting any time while sitting at home. On the other side, the purchase of property, and physical gold proved cumbersome exercise.

Gold, Stock Market, and Real Estate never move in tandem. While the quality stocks kept moving the stock markets, the big players ploughed money into gold as the best remedy of uncertainty in turbulent times. Despite infusion of funds and consumer-friendly policies devised by the Government, there were no takers for investing in real estate during the year 2020. Hundreds and thousands of built or partially built apartments are standing unsold for the lack of interest, by the end-users. However, with the consolidation of gold prices, the demand looks picking up in real estate now.

With stock markets, and gold prices going through the roof, the best options lie in Real Estate now. Valuations of quality stocks have reached a point of consolidation and gold prices are also stabilising after achieving 25% growth in one year only. Right pockets may be explored for picking up rental or commercial properties for eyeing on the passive income.

Friends, the basic principle behind every investment is to create wealth by earning good returns from the investments regularly. Early retirement is possible only if you accumulate enough wealth for you to afford your current lifestyle. Believe me, a timely investment in real estate/stock market/gold can help in creation of wealth to earn passive income later on.

During the past ten years the gold prices in India have gone up from Rs.18000/- per 10 gm. to Rs.50000/-. Nifty(Stock Market) has gone up from 6134 levels on 31/12/2010 to 14595 today. Real Estate has also given tremendous returns over the last ten years.

Conclusion: What are you thinking about dear friends? Try to understand the movements of these three pillars of the economy by correlating the circumstances as stated above and invest at the right time in the right option.

Links for following the various global markets:

1. https://www.moneycontrol.com/indian-indices/nifty-50-9.html
2. https://www.nasdaq.com/
3. https://money.cnn.com/data/markets/dow/
4. https://www.marketwatch.com/investing/stock/ASX?countrycode=AU
5. https://www.marketwatch.com/investing/index/DJIA
6. https://markets.ft.com/data/world/countries/hong-kong
7. https://tradingeconomics.com/japan/stock-market

How Expense Ratio Eats into Your Profits

Expense Ratio is the cost which every investor has to be best while investing in Mutual Funds and other related products. Before going deep into the relevance and calculation of this ratio, I would like to brief you about these very safe and income generating investments for you to comprehend the subject: Definition of Mutual Fund:

In simple words, Mutual funds invest in Multiple instruments with money pooled from many investors to invest across a spectrum of securities. Mutual Funds invest in various types of securities like Shares, Bonds, Govt Securities, Commercial Papers, etc. Mutual Fund is considered one of the most viable investment option for all types of income groups as it offers attractive returns to the investors. It does not require introduction of very large amount of funds but a nominal amount as small as Rs.500/-would be sufficient to start with. SIP is the most preferred option for investment by small investors in India. You can purchase any number of Mutual Fund units online at a daily arrived NAV(Net Asset Value) directly from the AMC.

Investors can pick any fund as per their goals and risk appetite. An Equity Fund could be riskier but yields higher returns, whereas a Debt Fund with Gilt Edged securities may be fully secure offering low returns. Historical data indicates an average return of +10% for investments with a minimum horizon of 5 years. Considering that all the funds are managed by highly qualified Fund Managers/Professionals, there is virtually no scope of losing your capital by investing in Mutual Funds.

With the passage of time, these traditional Mutual Funds have taken different forms to satiate the ever-increasing thirst of investors for augmenting their returns with maximum ease and diverse exposure depending on their risk appetite. Index Funds/ETF(Exchange Traded Funds), Fund of Funds, etc are the few most preferrable.

Index Fund:

Whereas the Mutual Fund invests in shares/securities and tracks individual investment daily, Index Fund is a mutual fund which the fund manager tracks with a particular index like S&P 500, Nifty50, ASX200, Dow 30, Nasdaq 100, Russel 2000. The Fund Manager prefers to invest in the bucket of securities held in the index implying an average return to the customers/investors at par with the Index only. If the Nifty 50 has gone up by 10% over the last two months, then the investors who invested in the Nifty 50 index will also get a return of app 10%.

index fund img: Courtesy bing.com

(Exchange Traded Funds) ETF:

ETFs are similar to mutual funds or index funds except that the Mutual funds can be bought or sold from the companies directly at the day end prices but ETFs are traded throughout the day like shares and can be traded any time of the day during the working hours of the stock market. ETFs generally hold stocks of commodities like Gold, Oil, Shares, Bonds, Currencies, etc.

ETF Fund image: Courtesy bing.com

Fund of Funds:

These funds have a large scope of providing multi-index spread over nulti-markets and countries to their customers. An investor living in India has an option to invest in International stocks like Amazon, Apple and Tesla by subscribing to these funds. Fundamentally, Fund of Funds is an investment strategy of holding a portfolio of other funds rather than buying individual stock and other securities. In simple terms, these Funds will buy other funds in their portfolios.

Hopefully, you have understood and comprehended the definition of mutual funds and their potential returns that may help you in identifying the right product for your investment. Let’s come to the subject i.e TER (Total Expense Ratio) that impacts the returns accruing to all the mutual fund investors.

Nothing comes free in this world! For that matter, no service comes free as there are always declared or concealed charges which you have to pay for utilizing those services. Despite no entry no exit charges on Mutual Funds, we have evolved a terminology known as Expense Ratio which is used by the AMCs to charge the investors. All costs of managing the funds are recovered from the investors at the time of exit. This cost comprises the management fee, brokerages, selling and marketing expenses, commissions, and other related expenditure.

Let us see how this TER is calculated and impacts a customer who has invested his money in any scheme of the mutual fund. A company(AMC) with an AUM of Rs.50000 crores earns a profit of 14% from its operations and as per SEBI guidelines, this company is supposed to charge TER @0.80%. The customer will get returns of 16%-0.80%=13.20%.

Management Fee: Almost all the Mutual Funds are managed by Fund Managers who are highly qualified professionals. Whatever salaries or contract amount is paid to the fund managers is booked under this head of expenses

Administrative Costs: Various charges such as brokerage, register, and transfer fee, legal and audit fee, advertising and, marketing costs, etc contribute as administrative expenses

Distribution Fee: Most of the schemes are marketed and sold by the mutual fund distributors approved and enlisted by the AMFI/NSE, etc A fixed rate of trail commission is paid to these distributors

If we sum up all these expenses and divide it by total assets of a particular Fund, the resultant value will be the Expense Ratio. Simple?

TER img: Courtesy bing.com

As per the SEBI circular, the under noted TER slab rates have been approved for all AMCs for meticulous compliance. SEBI has authorised certain exceptions that may cause a difference between two similar Mutual Funds. The investors need to compare the expense ratio of a company with other investment companies to ascertain whether this is worthy of investment or not A small difference in expense ratio can cause a considerable variation in your returns.

Assets Under Management(AUM)	TER for Equity Oriented Schemes	All other schemes excluding ETF/Index Fund	Index Funds	ETF Funds
Rs.500 crores	2.25%	2.00%
Next Rs.250 Cr	2.00%	1.75%
Next Rs.1250 cr	1.75%	1.50%
Next Rs.3000 Cr	1.60%	1.35%
Next Rs.5000 cr	1.50%	1.25%
On the next Rs.40000 cr	Total expense ratio exemption of 05% for every Rs.5000 cr	Total expense ratio exemption of 05% for every Rs.5000 cr
Above Rs.50000 cr	1.05%	0.80%	0.50%	0.35%

Total Expense Ratio(TER) as applicable in India

Friends, there is a distinct deviation in Expense Ratio between Equity/Debt and ETF mutual fund schemes. You will appreciate that equity fund involves 24×7 commitment and involvement of Fund managers for selling buying the securities by participating in all the trading sessions. This requires a lot of expertise, brokerage charges, and other connected expenses to be incurred by the Mutual Fund companies. Comparatively debt funds, index funds and ETF require minimal efforts as the entire process being passive in nature is less expensive. Hence the divergence in the Expense Ratio !!

However, the SEBI has allowed the AMCs to determine their own Expense Ratio based on the above chart and some relaxations as under:

1. For marketing and selling of mutual fund schemes beyond the top 30 cities across India, the AMCs have been allowed to charge 30 basis points .e 0.30 % of the fee in addition to the above-mentioned structure.
2. In the name of exit load AMCs have been allowed to include 0.05% in their TER

Where to find the TER(Total Expense Ratio): It’s very convenient to find out the Expense Ratio of any Mutual Fund Scheme either by accessing the relevant data available on the website of the concerned AMC or from the following sources:

1. Fund’s prospectus if you are already a customer
2. Financial News websites
3. AMFI

Though Expense ratio keeps changing in all the countries but it ranges in between 1 to 2% on actively managed funds and less than 0.20% on passively managed funds.

1. The USA, being the most developed and mature economy, expense ratio in actively managed funds like equity fund is less than 0.58% and it is .07% in passively managed funds. In ETF funds it was being charged at .03%

Conclusion: you will appreciate that the Expense Ratio as explained above is the actual cost incurred by the AMCs in managing these big Funds. The investors have suddenly diverted their investments in the newly found love of ETFs as the expense ratio is just a fraction. Friends, the Assets Under Management (AUM) of Indian Mutual Fund Industry as on November 30, 2020 has crossed a landmark of Rs. 20 Lakh crore and stood at ₹30,00,904 crore. The AUM of the Indian MF Industry has grown from ₹ 6.65 trillion as on November 30, 2010 to ₹30.01 trillion as on November 30, 2020 about 4 ½ fold increase in a span of 10 years. From this given data, you can visualize the reasons of expense ratio going down in India over the last few years.

Source: Amfi

http://www.amfiindia.com/indian-mutual

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibilityDisclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Signal’s Brian Acton talks about exploding growth, monetization and WhatsApp data-sharing outrage — TechCrunch

Brian Acton is crossing paths again with Facebook. Over more than a decade of building and operating WhatsApp, the company’s co-founder first competed against and then sold his instant messaging app to the social juggernaut. Only a few years ago he parted ways with the company that made him a billionaire in a bitter split…

Signal’s Brian Acton talks about exploding growth, monetization and WhatsApp data-sharing outrage — TechCrunch

Bitcoin and Etherium on flight to Moon!!

Image courtesy: Bing.com

Bitcoin is on fire in 2021!! It has already gained more than 10% in three days of this month. Unbelievably $34700 level achieved in just two days and indicators are signaling an upbeat mood from future perspectives too. Rightly commented as a FOMO ( Fear of Missing Out) effect by the keen observers of crypto markets, Institutions are reportedly accumulating Bitcoins on coin base platform in spite of heavy premium. With a limited supply of 21 million coins, Bitcoin always remains an all-time favourite amongst investors. Etherium is maintaining the pace too by achieving unprecedented levels of $900 this morning.

Image courtesy: Bing.com

It’s an interesting magical journey as this robust momentum is pushing up prices of any crypto coin having its name associated with Bitcoin or ether. Except for XRP facing legal suit from the SEC, most of the coins are joining the new year party.

Please check the price movement here: https://www.coinbase.com/price

Looks a right opportunity for the small investors to sit tight and watch all action from the sidelines as this is a high-risk market. You are not going to lose anything by just watching the movements from a distance. Wait for the right opportunity after settling down the violent storm to enter the markets again.

Disclaimer: The material and information contained on this website/blog are for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal, or other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Tesla to make India debut ‘early’ next year — TechCrunch

Tesla will begin operating in India in “early” 2021, a top Indian minister said on Monday, a day after the tech-centric carmaker said it was confident it would enter the world’s second most populated market next year. Tesla’s operations will begin with sales in early 2021 and then “maybe” look at assembling and manufacturing vehicles…

Tesla to make India debut ‘early’ next year — TechCrunch

UK Scare: Sensex Crash

Amidst the ongoing vaccination drive in the USA and the UK, there comes a bad news about a new corona variant from the UK. Many countries have announced halting air traffic originating from the UK in the wake of a sudden spurt in corona cases and its new variant recently. The news has jolted the entire world once again. The EU was looking all set for starting vaccination after clearance of Pfizer corona vaccine today but the new development has forced them to stop ferry and air service connecting the UK immediately.

Indian govt has also decided that all flights originating from the UK to India shall be temporarily suspended till 31st December 2020. A large number of the Indian Companies derive their maximum revenue share from the UK . These companies may feel the pinch due to the latest developments in the UK. The prevailing events will certainly result in under-par performance during the remaining period of the current financial year for a few companies like TATA steels,Tata Motors, Motherson Sumi and a few others.

The increasing number of corona cases in the USA, a new variant in the UK, and talks going around about overvaluation of some companies made the Indian markets crash today? However, Sensex losing more than 1400 points and Nifty closing 400 points lower on Monday didn’t cause any jitters for the ongoing IPO of Antony waste Handling cell Ltd that was oversubscribed within a few hours of its opening on Monday. This IPO was not successful in its first attempt in March 2020 as investors showed little interest in the IPO due to prevailing pandemic conditions worldwide.

It looks like this year 2020 has more worries for us at the fag end of December. X-mass celebrations may see dampened spirits by keeping the already financially strained and exhausted families indoors. This year has already tested the endurance level of everyone around the globe. Any further escalation in the crisis will subject the already suffering people to another level of ferocity in the coming year.

Thankfully, the DOW and other international markets have not shown any nervousness following the Indian debacle and we should hope that the moods of investors will be kept upbeat with the impending Financial Stimulus efforts going on in the USA.

** The House of Representatives, USA has passed the $900 billion corona virus bill that will bring some respite to those who were waiting for the financial stimulus eagerly. It will certainly improve liquidity position and consumer spending may increase before closing of the year. We may see improved foot fall of customers in the coming few days bringing scome cheers for the small businesses also.

Stay safe and keep invested

Primary Markets: Investing in New Stocks(IPO) How to Buy IPO

Friends, It may sound strange but the developed economies look averse to the more friendly environment for retail investors prevalent in the developing economies. There could be various reasons attributing to such apparent contrasting conditions. Maybe, the retail investors in developed countries have other priorities in place. There could be a lack of enthusiasm by the small investors or you can say there are virtually no small investors in the developed countries.

Though there can’t be any comparison with the USA, the most robust economy in the world but my effort is to showcase the procedures as visible from the layman’s perspective. Let’s discuss the situation prevalent in the two top democracies i.e India and the USA along with another developed economy Australia. All the three countries have a very effective regulatory system in place which takes care of stock markets functioning in their respective countries. we have regulatory bodies who take care of stock exchanges for safeguarding the interest of the investors.  Regulatory bodies protect the interests of investors and traders by providing a healthy environment in the equity market. These are::

1. SEBI ( Securities Exchange Board of India): India
2. ASIC ( Australian Security and Investment Commission): Australia
3. SEC ( Securities and Exchange Commission) : USA

IPO/Float. Primary Market

Australia: IPO also known as Float in Australia is opened by companies for subscription but investing in stocks through IPO by the Retail Investors is a challenging job. Companies planning to raise capital through IPO’s tend to sell their entire stock to Institutional Investors/Stock Brokers for ensuring successful launching of the IPO. Some brokerage houses get more share from the companies while others are not so lucky. That makes a tricky exercise for retail investors to access the IPO process.

The interested retail investors subscribe to the issue by opening a broking account with a broking house i.e stockbroker. It depends on the whims and fancies of the stockbroker as to which investor he wants to allot the IPO and how many shares will be allotted to the investors. You are fortunate enough if your broker considers you a potential applicant for the IPO.

Photo by Jose Francisco Fernandez Saura on Pexels.com

There is one more route for the allotment of IPO in Australia. If you are already a customer of the company, you are likely to get an invitation from the CEO to participate in the IPO.. Otherwise, most of the public is left out of the IPO process in Australia and whatever the retail investor gets is not more than 10% and that too on a selective basis only. The retail investor remains in dark throughout the process.

USA: Almost on the same lines, all companies hire the services of investment Banks/Brokers for selling their shares ignoring the Retail Investors. Generally, a retail investor has to open a broker account with the brokerage house, send money in his account and wait for the allotment. You are fortunate if the broker considers you as a potential applicant and processes your application for allotment of shares.

Historically, the ratio of Institutional Investors to Retail Investors for the issue of shares is 90 to 10. The Investment Bankers team up to form syndicates with each Bank getting a share of IPO. The Banks/brokers generally prefer big Institutional investors, Mutual Funds, Pension Funds, Hedge Funds through a process called Roadshow. A roadshow is a series of presentations made in various locations leading up to an initial public offering (IPO). Investment Bankers/Underwriters make a sales pitch to potential investors before going public. Suddenly one day the retail investors come to know about the listing of the IPO and is forced to buy from the secondary market price that is normally very high for the initial few days.

India: The most transparent system of IPO allotment appears to exist in India as there are predecided numbers of shares reserved for all categories including retail investors. Date of application/Date of allotment/Date of Listing/Face Value of the Share/Premium if any, all these factors are predecided and available on the application form.

A retail investor can apply for a multiple numbers of lots in one application up to Rs.2 lac only. Normally 35% of total shares are reserved for Retail Investors. One important feature of the Indian IPO system is the application through ASBA(Applications Supported by Blocked Account) meaning no amount of money will be taken out of your Bank account till allotment. Your money always remains in your Bank account till you get a firm allotment of the shares. The successful applicants are drawn through a computer random process at the pre-decided date and the lucky ones get the allotment of shares in their Demat account again on the fixed date.

The scheduled listing of shares takes place on the fixed date as mentioned in the application form. The investor is in a position to book profit by selling the allotted shares immediately in the stock market. Those who were not lucky in the computerized draw, they can buy from the open market at the prevailing prices. The whole process is transparent like a mirror and does not take more than 15 days.

Friends, I will be happy to find feedback about the procedures as explained by me. You can correct me if you feel like it.

Stay Safe Stay Invested

Demat Accounts- Passive Income Source by Investing/Trading in Stocks

Pandemic conditions not only brought scary moments worldwide but also happened to provide some thrilling vistas to the new generation in India. With a regular stream of income dropping in their Bank accounts and virtually no outlet to spend freely, these people found trading in stock markets a very exciting idea. First-quarter ended on 30/06/2020 saw more than 2.4 million Demat accounts opened in the various Banks/DP’s by these customers!!

As a matter of fact, the number of Demat accounts increased substantially during the current Financial Year in India. These figures have jumped from 35.9 million on 31/03/2019 to 40.8 million as of 30/11/20, an unprecedented increase of 4.9 millions accounts in 8 months. A great performance by any yardstick. This year has witnessed phenomenal growth in the stock market operations with participation from a new set of customers. Every millennial was confined to the four walls of his house due to lockdown conditions enforced by the authorities starting in the month of March 20 and these enterprising professionals found trading in stocks an engaging medium for a few hours during the day. I am sure some of them will turn out to be serious investors in stock markets.

Let’s try to comprehend the entire process of Demat account opening in India

Central Depository: In India, there are two depositories that hold your shares/NCD’s/other Financial securities safely in the electronic form for you. These are the CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited. Their nature of business is the same but due to ever-increasing number of Demat accounts, CDSL came into being to share the workload of NSDL in 1999.

Depository Participants/Brokers: All Financial securities viz Shares/NCD/ etc are held in demat accounts opened by the customers in DP’s. The DP’s(Depository Participants) are a link between the customer and Depositories. These DP’s could be Banks and Financial Institutions as well.

Demat Account: Like we need a Bank account to keep our money safe, we need a demat account to keep our dematerialised Financial securites like shares/NCD’s safe

So, if you wish to trade in the Indian stock market i.e. buy and sell securities, firstly you need to have a Demat account.This demat account needs to be attached with your savings account for carrying out buy/sell transactions in the stock market.

Where to Open Demat Account:There are a large number of DP’s who are providing the job of a broker/DP efficiently in India. To quote a few; Zerodha,Angel Broking,5paisa, Upstock,IIFL are the leading DP’s right now. Most of the Private and Public Sector Banks are also functioning as Depository Participants/Brokers nowadays. I will recommend opening Demat account with your existing Bank only as they can easily provide complete package of services on a single platform

Eligibility:

1. Any Indian resident major/minor can open demat account in India. Though documents are required to be executed by the natural guardian in case of minor
2. NRI can also open demat account in India by producing his POA/POI/Bank documents but the passport must contain his birth place in India.

List of Documents required for opening Demat Accounts:

• Identity Proof: PAN card, voter id, Aadhar card, Passport etc.
• Address Proof: Aadhar card, bank statement, driving license, utility bills etc.
• Bank account details

Procedure::

Account Opening Form: You need to fill up and submit the Demat account opening form along with necessary details either in person or online.

KYC Compliance: Adhere to (KYC) norms and submit the copies of KYC documents to the Depository Participant.

Verification: A representative of DP shall conduct in-person or online verification to cross-check the information furnished by you in the Demat account opening form.

Account number/Unique ID: Once the verification is completed, the DP shall provide you a Unique Account number or ID and Password. It normally takes 5 to 7 working days to open a Demat account.

Access your Online Demat Account: Your unique ID is the key to access your online Demat account. You are good to go! You are prompted to change your password while loging into your Demat account for the first time.

Maintenance Charges(AMC): There are annual charges for maintenance of Demat accounts. It varies from Bank to Bank ranging from Rs.100 to 800 per year. However, some brokers waive off this cost subject to their own terms and conditions

Brokerage: For every transaction you are charged a certain percent as brokerage which can be negotiated and reduced depending upon the quantum of operations in your Demat account. Some Banks have recently started a fixed amount of Rs.20 per transaction for intraday trading to attract more customers.

As per the SEBI guidelines, any account which has not been operated for more than 1 year is treated as Inactive in India. Incidentally, the country has 75% of Demat accounts as INACTIVE as of date. Not an encouraging situation at all. We hope this generation of new customers would find interest in stock investments and continue maintaining their accounts in good health.

Hi Friends, Do you feel like venturing into the most volatile and high yield world of investments. You guessed it right; I am talking of The Stock Markets. We all understand that stock markets are the only investment avenues that offer returns of more than 14% with long-term perspectives. Despite turbulences and tremours caused in the global economy over the past fifty years, the long term returns have never been short of 14%. If you have risk appetite and temperament to remain invested for more than five years then this is the place you can put your money in. for unexpected returns.

What are you waiting for? Login to your Bank account and start filling up the prescribed form for opening your Demat account right now.

Happy reading and keep sending your feedback

Pandemic Cases on rise: So are the Stock Markets!!

Do the stock markets have any connection or relevance with production/consumption/Industrial Health and general well being of the people? If yes, then how come the global stock markets have attained historical peaks while the Corona cases are still rising alrmingly.

Movements of people is restricted as Europe, America, Asia finds no relief whatsoever from this deadly COVID-19 . The leisure and Hospitality Industry, Construction Industry, Food Services Industry are not comfortable and so are many other Industries rendering millions of people unemployed. A large number of people are at the mercy of Govt’s.support through various financial packages.

The deceased are not getting final good bye from their near and dear ones A sealed coffin and no kssing by the relatives in the west or dead wrapped in a polythene bag consigned to flames in a hurriedly arranged cremation in other places makes one think about the gory situation the world is?

There are no immediate signs for availability of Corona vaccine despite claims by the Govts and Pharma comapnies assosciated with the research work.

Since Stock markets are barometer to the overall economic conditions of the country, it must be construed that overall situation has improved over the past few months and global economy is right back on the pre COVID days.But this is not the case!

GDP figures of all the countries have shown a reverse curve as compared to December 2019. Unemployment figures find no reason for any celebrations either.

Stock Exchange Index	March 2020	As on today
DOW	20081	29479
Nasdaq	7150	11829
Nifty	7605	12719
ASX200	4546	6405
DAX	8495	13076
KOSPI	1474	2493
FTSE	5080	6316

If we look at the rosy picture of stock markets as compared to what is happening all around us, the developments look interesting. The Govts might have cautiously opened up the economy to ensure sufficient cash generation for them to run affairs of the country or keeping the people engaged in meaningful acitivities but practically the people are feeling more and more isolated now.

Thanksgiving,Diwali,Christmas or new year eve could bring some customery celebrations mood but the fact remains that there is remote possibility of people gathering in thousands without face masks or other safety guards prescribed by the authorities in any near future.

Till then keep your spiritis high by watching the curve going up as far as Stock Markets are concerned and wait for COVID the curve to relent and return to tolerable levels

Happy Holidaying and remain safe !!!!