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Chennai Investment：4Q24 Economic and Market Update

4Q24 Economic and Market Update

This is David Kelly.

I’m Chief Strategist here at J.P. Morgan Asset Management and I head the team that produces the Guide to the Markets.  Welcome to the Economic and Market Update for the second quarter of 2024.

Despite facing numerous challenges in 2023, the U.S. economy defied widespread predictions of recession. Growth moderated to a still-strong 3.2% pace in the fourth quarter while inflation continued to fall towards the Fed’s 2% target, although progress has slowed in recent months. This year, moderate job gains and easing inflation should allow the U.S. economy to continue on a soft-landing path. That said, as cyclical tailwinds fade and the U.S. election approaches, there are still plenty of risks to economic stability.

Meanwhile, while the Federal Reserve held rates steady its March meeting, the Fed’s updated dot plot showed only the smallest possible majority of FOMC members expecting as many as three rate cuts in 2024, and they reduced the number of expected rate cuts in 2025 from four to three, underscoring the very gradual nature of projected policy easing. On a more positive note, they did express their intention to begin to reduce quantitative tightening fairly soon.

As investors adjusted to the prospect of fewer rate cuts, long-term interest rates moved higher during the first quarter. Equities, however, appeared unphased by this, setting new all-time highs with the largest stocks still leading the charge.  In the year ahead, attractive relative fundamentals outside of the largest stocks should support broader equity market performance, while fixed income should play its traditional role of providing income and diversification. Outside of public assets, alternatives still offer investors to enhance portfolio performance through alpha, diversification and income.

The Guide to the Markets, now in its 20th year, is constructed to try to illustrate economic fundamentals and investment opportunities and risks.  However, it is important to do this concisely.  There are over 60 pages in the Guide, but that is far too many for any conversation about the markets.Chennai Investment

So, what we do here is boil it down to just 11 slides.  In particular, we assess the recent performance of the markets and economy, considering trends in growth, jobs and inflation in the U.S., and how these trends are shaping the outlook for monetary policy.  This is followed by comments on growth from around the globe.  Finally, we consider the implications of all of this for those investing across asset classes and highlight the importance stepping out of cash and actively engaging with opportunities in alternative assets.

The U.S. economy ended 2023 on a high note, with the fourth quarter marking the sixth consecutive quarter of growth at or above 2%. While the economy may struggle to match last year’s impressive performance, 2024 looks set to be another year of expansion.

Consumers have displayed impressive strength, supported by a tight labor market. That said, some signs of stress are emerging. While revolving credit as a share of disposable income is not flashing any warning signs, auto and credit card loan delinquencies have risen above their pre-pandemic levels, with student loan delinquencies likely to follow. As a still tight labor market and rising real wages offset dwindling excess savings and tighter credit conditions, consumers should continue to spend at a more moderate pace this year.

Business spending has endured tighter lending standards better than expected, supported by increased spending on intellectual property with greater emphasis on developing artificial intelligence capabilities. Tailwinds from AI spending and support from the federal government should continue to partially offset the impact of higher interest rates, while inventories should continue to grow at a steady pace. However, tighter lending standards and weaker corporate profits could still constrain growth in capital expenditures.

The housing market has stabilized at depressed levels, and while a boom in the sector seems unlikely given elevated mortgage rates, tight supply suggests a recovery in activity is more likely than another decline. Trade may be a slight drag on the economy as a still-strong dollar and sluggish global growth weigh on exports. Meanwhile, increased spending on public infrastructure and stronger hiring should continue to support government spending.

Overall, the U.S. economy remains on a soft-landing track, although last year’s momentum looks set to fade. That said, with a U.S. election on the horizon, high policy rates, and elevated geopolitical tension, risks remain that could knock the U.S. economy off its steady path.

While the labor market has normalized from its post-pandemic boom, the U.S. economy still added an impressive 250,000 jobs per month in 2023 and has sustained this pace into early 2024.  This has occurred even as the unemployment rate has remained at or below 4% since December 2022 – the longest such streak of low unemployment since the late 1960s.  Despite fears of an economic slowdown, strong growth in the U.S. labor supply has allowed employers to steadily hire workers and narrow the gap between supply and demand.

After falling sharply during the pandemic, labor supply in the U.S. staged an impressive recovery over the last two years, largely due to increased immigration. In fact, in fiscal year 2023, Immigration Services approved over 2 million applications for employment authorization, a 70% increase from a record 1.2 million in fiscal 2022.  With this surge in migrant workers, employers were able to fill open job openings without applying upwards pressure to wages, helping to explain why strong job creation hasn’t sparked higher inflation.  Importantly, a strong recovery in the labor force participation rate has also boosted labor supply. While continued aging of baby boomers into their retirement years has left the overall labor force participation rate below pre-pandemic levels, participation amongst the working age population, or those aged 18-64, has fully recovered its pandemic losses.

Moving forward, still elevated job openings and moderate economic growth point to steady job gains ahead.  While this would seem to imply a steady decline in the unemployment rate, the continued influx of migrants should provide a fresh source of workers which could keep the unemployment rate within a narrow range of 3.5% to 4.0%.

While year-over-year CPI inflation remains well below its June 2022 peak of 9.1%, it has stubbornly hovered around 3.2% since October, sparking fears of no further meaningful decline  However, we believe that there are still disinflationary forces that should keep inflation on its downward path this year.

Core goods prices trended lower in 2023 as supply chain distortions related to the pandemic and Russia’s invasion of Ukraine continued to fade. Even with recent conflict in the Middle East, supply chains are still in good shape, and goods prices should remain well behaved. On the more volatile components, energy prices have risen in recent months while food prices continue to ease. Moving forward, slow global demand limits the likelihood of a surge in either of these categories. Lastly, shelter inflation, which accounts for over a third of the CPI basket, should follow real-time measures of market rent increases lower.

That leaves us with core services prices excluding housing, a closely watched measure by the Fed given its ties to the labor market. As we show on the right-hand slide of slide 27, progress here has stalled in recent months, largely due to “transportation services,” which remains elevated due to things like auto insurance and repair costs. However, as the rollover in vehicle and auto prices feed through the data, pressures here should ease substantially. This, along with moderating wage growth, should allow services prices to trend lower through the end of the year.

Overall, the disinflationary trend established in 2023 should continue into 2024. While the ride down may take slightly longer than anticipated, the Fed should feel reasonably confident that inflation can fall to close to their 2% target by the end of the year.

With the fourth quarter earnings season in the books, earnings growth finished 2023 flat despite a year of above average economic activityNew Delhi Stock Exchange. While these are seemingly lackluster results, they actually surpassed initial expectations for a small earnings contraction. Robust economic activity supported revenues, which were the largest contributor to earnings growth, as consumer strength and pricing power helped boost sales. Margins, however, have detracted from earnings as higher wages, inflation in input costs and geopolitical turmoil offset some of the costs savings of adapting more efficient technological processes. This dynamic was evident in the fourth quarter as margins fell after a third quarter recovery.

While profits could experience healthy growth in 2024, downside risks to analyst expectations for double-digit earnings growth remain.  Indeed, gloomy commentary from management teams point to tougher times ahead as growing revenues will become increasingly difficult in an environment of moderating consumer demand and disinflation. However, after the “Magnificent 7” companies drove the lion share of earnings growth in 2023, profit leadership should broaden out this year.

Late last year, the Federal Reserve sparked investor enthusiasm for aggressive policy easing in 2024 after they signaled that rates are at their cycle peak. Since then, mixed economic data has challenged investors’ outlook for rate cuts and left them searching for more guidance.

At its March meeting, the Federal Reserve left rates unchanged at a range of 5.25% to 5.50% and continued to signal three rates cuts in 2024.  However, they cut their forecast for rate cuts in 2025 from four cuts to three.  In addition, they boosted their projection for the federal funds rate in the long run from 2.5% to 2.6%, in a sign of a slightly more hawkish stance.Agra Investment

In addition, to rate cuts the Fed signaled that they plan to slow the pace of quantitative tightening fairly soon.  This should leave the Fed with much larger Treasury holdings that before the pandemic for an extended period of time, helping hold long-term interest rates down.  With market expectations and Fed messaging very much in sync, it would likely take a meaningful change in the economic outlook to trigger any sharp movement in long-term interest rates in the months ahead.

The international economy ended 2023 on a rather sluggish note, although there were some exceptions.  This dynamic will likely persist into 2024, as some economies could outshine others amidst slowing global momentum.

Depressed sentiment in China continues to challenge both domestic and global growth, and even more economic troubles could lie ahead without meaningful policy support for consumers and manufacturers. Similarly, Europe remains burdened by weaker consumption and business activity, particularly in Germany. However, the prospects of lower energy prices and rising real wages have sparked optimism for improvement ahead. In Japan, the end of negative interest rates should serve as a strong tailwind for activity after the country narrowly avoided a technical recession last year.  Other markets, such as Mexico, India and Taiwan have benefited from positive secular trends, including supply chain diversification and semiconductor manufacturing related to AI.

This year could bring better performance for places like Japan and some European markets while others, like China, may continue to struggle. With U.S consumer activity expected to slow, there is still potential for growth differentials to narrow and for other global markets to surprise to the upside.

After hopes for aggressive policy easing fueled an impressive bond market rally late last year, most sectors shown on slide 31 are off to a slower start in 2024 as resilient economic data have forced investors to reign in their expectations for rate cuts. That said, with market and Fed expectations now largely in-line, the worst of bond market volatility is likely behind us, and current yields appear increasingly attractive.

Indeed, with higher yields now offering an attractive “yield cushion,” fixed income offers strong asymmetric returns. Taking the U.S. Aggregate as an example; if yields were to fall by 1%, an investor could expect a return upwards of 11%. However, if rates were to rise by 1%, the coupons from the bonds would help offset some of the price depreciation, and that same investor could expect a loss of only 1.5%.

While rising interest rates led to negative bond returns in 2022, those higher rates today offer investors both positive real income and the portfolio protection provided by the traditional tendency of bonds to rally when stocks falter in the face of economic weakness.

After an impressive 2023, U.S. equities have continued their upward momentum in the early months of 2024. In fact, resilient corporate profits and hopes for policy easing have produced multiple all-time market highs this year. However, market performance remains concentrated as the largest stocks in the index have continued to dominate. While valuations might look stretched, there are still plenty of attractive opportunities outside of this cohort of Mega Cap stocks.

On the left of slide 10, we compare the price-to-earnings ratio of the top 10 stocks in the S&P to that of the broader index. The historically narrow nature of the recent rally has left the top 10 stocks significantly more expensive than the broader index, while the remaining stocks look cheap comparatively and are trading closer to their long-term average.

Indeed, index concentration is not a new phenomenon as the weight of the top 10 stocks in the S&P 500 has been rising since 2016. However, while the top 10 stocks dominated earnings growth last year, their earnings contribution hasn’t kept pace over the long run. With the top 10 stocks now representing a third of the index but only a fourth of the earnings, there appears to be a strong case for investing in the rest of the index.

If economic growth continues at a steady pace in 2024, gains should broaden out beyond the largest names as the market grinds higher. In this environment, an active approach can help identify those companies with high quality earnings and attractive valuations that are being overlooked by the markets.

While many U.S. based investors may feel inclined to focus on opportunities at home, there are attractive fundamental tailwinds emerging outside of the U.S. that can’t be ignored.  Slide 46 of the Guide aims to highlight opportunities that investors may be missing.

In terms of earnings growth, the U.S. has been the standout market as of late, although prospects in other countries are improving. In particular, higher inflation in Japan and Europe has allowed companies to raise prices and expand their margins, and the end of negative interest rates in both countries should help boost profits for Financials, a key sector in both markets. While pessimism around China has weighed on Emerging Market earnings estimates, they have stabilized in recent months, suggesting that the worst of this pessimism is already priced in.

With the exception of China, strong equity returns since the beginning of 2023 have pushed valuations higher. Even still, in both absolute terms and relative to their own histories, international markets continue to look attractively priced compared to the U.S. Overall, the potential shift in earnings growth across international markets, combined with discounted valuations, presents an attractive opportunity for U.S. investors looking to diversify abroad.

With equity valuations elevated and bond yields low relative to history, less impressive returns from the 60/40 portfolio moving forward may force investors to look elsewhere for consistent outcomes across alpha, income and diversification. However, investors willing to venture outside of the public markets can leverage a range of different alternative assets to reach their desired outcomes. Indeed, as we show on slide 55 of the Guide, alternative assets can offer low correlations to public markets, diversified income streams and enhanced long-run returns.

Real assets shown towards the left, such as real estate, infrastructure and transport, tend to be less correlated to a traditional 60/40 portfolio while providing robust income. Private equity and venture capital, towards the right, provide much higher total returns but come with higher correlations to public markets and less income generation.

The classic 60/40 stock-bond portfolio still looks attractive, but adding a sleeve of alternatives can help long-term investors achieve strategic goals through higher alpha, better diversification and enhanced income.

Thanks to the Federal Reserve’s rate hiking campaign, cash looks more attractive today than in the last two decades. With yields north of 5% and minimal risk, many investors have decided to allocate more heavily to cash, pushing money market fund assets to a record $6.1 trillion.

However, history shows that staying parked in cash after the peak in interest rates usually leaves money on the table. In the last six rate hiking cycles, the U.S. Aggregate Bond Index outperformed cash over each of the 12-month periods following the peak in CD rates, while the S&P 500 and a 60/40 stock-bond portfolio outperformed in 5 of these periods.

This is not to say that investors should abandon cash altogether, as liquidity is an important allocation in any portfolio. However, there is an opportunity cost in holding onto too much cash, and investors should put long-term money in long-term assets. Following a peak in interest rates there has always been a better asset than cash to deploy capital.

This remains the case today, as the U.S. and global economies continue to grow even as inflation wanes and central banks begin to back off from very tight monetary policy.  However, with the higher valuations produced by the strong investment returns of 2023 and early 2024, it is more important than ever that investors maintain well-diversified portfolios designed to reduce risk as well as provide solid long-term income and capital gains.

For more on the Guide to the Markets, visit our website at am.jpmorgan.com.

Mumbai Investment

Investment

Mumbai Wealth Management：When to Use a Robo-Advisor (and When to Avoid Them)

When to Use a Robo-Advisor (and When to Avoid Them)

Robo-advisors have one key purpose: to simplify the investment process. These automated digital platforms use algorithms to provide investment advice, portfolio management, and other services with little to no human intervention. But are they right for your needs? They’re the ultimate “set it and forget it” strategy for passive investors, but the lack of a real human touch could be holding you back. Here are some key pros and cons to consider when deciding if a robo-advisor is your best choice.Mumbai Wealth Management

Being aware of the fees you pay is important to investing wisely. One of the biggest appeals of robo-advisors is that they charge far lower fees compared to human financial advisors. Fees range from about 0.25% to 0.50% of assets under management, while they may be closer to 1% for a human financial advisor.Simla Investment

Opening a robo-advisor account can take as little as 10 minutes online. The process is very simple compared to meeting with a traditional advisor.

Once you complete the account-opening questionnaire, the robo-advisor will automatically invest your money and manage your portfolio according to your risk tolerances and goals. This hands-off approach is convenient for many.

Many robo-advisors offer automated tax-loss harvesting, selling off underperforming assets to offset capital gains and save on taxes. This perk is usually only available from human advisors charging higher fees. Here’s what else to know about using an investment loss to lower your capital-gains tax.

In addition to investment management, many robo-advisors help you plan for specific goals like retirement or buying a home through their app and dashboard.

Some robo-advisors do require minimum account balances ranging from $500 to $5,000. This threshold locks out those without much starting capital.

While robo-advisors claim to personalize your portfolio, the reality is you still end up with a largely generic asset allocation. There’s little customization beyond your risk profile. I mention tax-loss harvesting above, but automated advising has limits compared to an experienced human advisor who can utilize more advanced strategies. If you want to discuss your unique situation with an advisor, robo-advisors may leave you wanting more.

Robo-advisors are designed to make investing as simple as possible. This means one of their biggest downfalls is that they often offer narrow investment options and generic portfolios, without fully taking your personal situation into account. So, robos work well for generalized goals like retirement. But they lack expertise for specialized needs like estate planning, trusts, and managing options/derivatives.

The choice between a robo-advisor and human advisor depends on your situation. For hands-off investing with minimal fees, a robo-advisor could suffice. They can be a great choice for newer, younger investors. But for advanced planning and strategy, a human touch may still be required for advice you can trust. The tradeoff here will be cost, but the value could be well worth it if your advisor knows what they’re doing.

Jaipur Stock

Financial

Varanasi Stock：Annuity Accounts： Simple Vs Compound Interest

Annuity Accounts： Simple Vs Compound Interest

Simple interest annuity accounts do not compound your gains. You get a fixed, declared rate for your chosen term. It does not matter if you take withdrawals.

For example, let’s say you invest $100K into a 5-year fixed annuity offering a 6.00% simple interest rate. This would translate to $6,000 yearly interest gains – or $500 monthly. That’s perfect for those who want a regular income stream without touching their $100K principal.

But even if you do not withdraw your $6,000 interest, you would only receive $6,000 in interest in the following years. This means your policy credits $6,000 a year each year no matter what. After 5 years, you would have made a total of $30,000 (5 years at $6K a year). That’s simple interestVaranasi Stock. The math is easy and your gains are set from the start.

Let me start by saying insurance companies aren’t dumb. They do the math too. That’s why you’ll see that Simple Interest annuity policies usually have higher yields than Compounding annuity accounts. Insurance companies offering both types will credit different rates for the same term.

If we use the two five-year examples above, you can see that a 5.50% compounding rate is nearly equal to a 6.00% simple rateJaipur Investment. In fact, the compounding policy would yield a tiny bit more.

Also, know that these numbers are not pulled out of thin air. This is how the comparisons usually shake out. There is a spread between the two types of accounts that make them align in terms of overall interest credited.

Here’s where it gets interesting. Let’s say all other things being equal, you’re considering the two policies above. One five-year annuity plan that compounds at 5.50% — and one crediting 6.00% simple interest each year.

If you take no withdrawals, the compounding policy wins by approximately $700Kolkata Investment. Case closed.

But when regular withdrawals are taken, the compounding magic is eliminated. Let’s say you purchased the 5.50% policy and withdrew your interest regularly on a monthly or yearly basis. You would only receive $5,500 a year for a total of $27,500 after five years.

Woah, that’s a whopping $2,500 less than the $30,000 you’d get from the simple interest annuity! That’s why it’s essential to have an idea about your interest withdrawals before investing.

Currently, there are only a few companies offering simple interest MYGA (multi-year guaranteed annuity) accounts. Ibexis, Sentinel Life, and Atlantic Coast Life are three prominent players in this market. The latter two also offer compounding annuity policies as well.Bangalore Stock Exchange

Perhaps more will come along, but the three companies above are known for competitive rates. There are other important features to consider when investing in an annuity like AM Best rating, liquidity features, surrender charges, etc., That’s why it’s wise to talk with an expert before investing.

Generally, if you’re unsure about withdrawals, compounding policies are best. But you can see from the case study above that running the numbers is important. That’s where brokers add value. We can discuss the nuances of all types of policies so you are maximizing your gains and growth.Jinnai Wealth Management

Chennai Stock

Gold

Jaipur Wealth Management：India’s ETF market has jumped to Rs 6.5 lakh crore, grabbing 13% of mutual funds, says NAM India’s Arun Sundaresan

India's ETF market has jumped to Rs 6.5 lakh crore, grabbing 13% of mutual funds, says NAM India's Arun Sundaresan

ETFs are experiencing a surge in popularity, with total assets in India reaching approximately Rs. 6.5 lakh crores. However, it’s crucial to be mindful of the impact cost, as lower liquidity in a specific ETF can lead to higher costs. For instance, within the same ETF category, such as Nifty, impact costs can vary significantly, ranging from as low as 0.02% to as high as 2%.

Investors are advised to carefully assess volume and impact cost data before making investment decisionsJaipur Wealth Management. In an interview with Navneet Dubey of BT Money Today, Arun Sundaresan, Head ETF at Nippon Life India Asset Management Ltd.Jaipur Wealth Management

(NAM India), discusses the potential risks for individual ETF investors. Sundaresan delves into whether ETFs can function as shock absorbers due to their liquidity or, conversely, contribute to increased volatility. Edited Excerpts:

BT: What are ETFs, and how do they differ from mutual funds? And how can you place ETFs in your portfolio in current market situations?

AS: Exchange Traded Funds, or ETFs as they are called, are also mutual fundsKanpur Wealth Management. The key difference is that ETFs are listed on the stock exchanges just like stocks or debt securities. ETFs replicate a particular index. For example, a Nifty ETF will have the same stocks and in the same proportion as the Nifty 50 index. Investors get to participate in the segment of markets as they choose.

Several types of ETFs allow investors to invest in equities, fixed income and commodities markets. Within each asset class, there are several funds to choose from. For instance, investors could invest in market cap-based funds like large cap, mid cap or small cap. They could also play sectors or themes like Banking, IT, Consumption, etc. through ETFs. Similarly, there are a host of fixed-income strategies and gold and silver ETFs that allow investors to make their asset allocations and have specific investment strategies. Therefore, regardless of market conditions and based on individual investment preferences, investors could choose and invest in a range of ETFs.

BT: What exactly is liquidity in the context of ETFs, and why is it so important for investors?

AS: Liquidity to ETFs is like water to fish; it’s critical that when investors attempt to buy an ETF on the exchange, there should be sellers, and vice versa. There should be sufficient trading volume in the particular ETF to ensure that the transaction happens at prices which are close to the price displayed on the exchanges. For example, think of a stock or an ETF, which is trading at a price of 100, and an investor is attempting to sell the same. When he places the sale order, it should ideally get executed at a price close to 100. Now, this would happen only if there were sufficient volume, and the stock or ETF is liquid. Else, there would be a high Impact Cost (IC), and the sale price may be, say, 97 or 98 instead of 100, in which case, the investor loses 2-3% returns due to lack of liquidity in this case. Liquidity, which is essentially good trading volume, is very important in the context of ETFs and would have a direct bearing on returns.

BT: Can you explain the difference between primary and secondary market liquidity for ETFs and how each plays a role?

AS: The trading volume that happens in the exchanges is secondary market liquidity. Good trading volume is essential for ensuring efficient transactions of ETFs on the stock exchanges. For large transactions, which are above Rs 25 crores, investors can transact directly with the Asset Management Companies.

BT: What are some key metrics investors can use to gauge the liquidity of an ETF before investing? Have you observed any recent trends in ETF liquidity, and what might be driving them?

AS: Volume of transactions and Impact Cost (IC) are two important metrics that investors have to assess before choosing to invest into ETFs. This data is available on the stock exchanges. Investors will just have to type out the name of the ETF, and they could find a lot of data about the ETF. The trading volume for any period in consideration, and the impact cost of the ETF are published. Higher trading volume and lower impact cost should be preferred.

Generally, when overall market sentiments are good, activity levels tend to go up, resulting in better volumes. However, the volumes tend to differ between different types of ETFs and within the same category between ETFs. Hence, investors need to assess the same before making any investment decisions.

BT: Do you think ETFs enhance access to diverse asset classes for retail investors due to their liquidity? In times of market volatility, can ETFs act as shock absorbers due to their liquidity, or can they exacerbate volatility?

AS: ETFs certainly offer investors the opportunity to invest across diverse asset classes. Equity, fixed income, gold, and silver are the various asset classes that investors could take exposure to using ETFs. There are various strategies within these asset classes. For instance, there are ETFs which allow investors to invest only into Government Securities and there are also ETFs which provide exposure to corporate bonds. On the equity side, there are several innovative strategy ETFs like Dividend Yield, Value, etc., through which specific strategies could be played out. Volatility in the market would impact ETFs as well, though if investors ride that out well by matching their investment strategies with their objectives, they could have a pleasant experience in the long term.

BT: Are there specific types of ETFs (e.g., smart beta, thematic) that tend to be more or less liquid?

AS: Within the ETFs, the market cap-based ETFs like Nifty, Midcap, etc tend to be relatively more popular and, hence, command higher volumes. Other types of ETFs, which are based on specific strategies, could be relatively less on liquiditySurat Stock. Hence, investors should build and reduce their exposures in these funds gradually.

BT: How do you see the liquidity landscape for ETFs evolving in India over the next few years?

AS: ETFs are gaining popularity. Total assets in ETFs in India are approximately Rs 6.5 lakh crores. This accounts for roughly 13% of the total mutual fund assets. In the global scenario, ETF assets are over 10.5 trillion USD, and in many developed countries, ETF assets account for more than 50% of the mutual fund assets. We expect significant growth in the ETFs in India in the future, which will further enhance the liquidity landscape for ETFs

BT: How crucial is it for an investor to keep track of tracking errors?

AS: An ETF should very closely replicate the underlying index. For example, if an index has delivered 10% returns, the ETF return also should be similar. Tracking Error measures how close the ETF return is when compared to the index and how volatile this difference in returns is. A lower Tracking Error would mean that the ETF is replicating the index closely. It is an indication of how well the ETF is managed and is one of the important considerations for investors.

Varanasi Investment

Management

Ahmedabad Investment：Top 5 sugar stocks under ₹100 to add to your watchlist

Top 5 sugar stocks under ₹100 to add to your watchlist

Despite this, the Indian sugar industry is battling several challenges. The yield of sugarcane in India is very low compared to other major exporters. The production cost of sugar is also very high compared to other crops.

Moreover, sugar has a short smashing season, and with a growing population, the demand for sugar is only going to go up. These challenges are hindering India’s progress with respect to sugar exports.

In recent weeks, Indian sugar stocks have been in the limelight amid concerns about a global sugar shortage.

With all that’s been going on in the industry, let’s look at thebelow 100 that still have enough headroom to grow.

First on this list is KCP Sugar & Industries.

The company is engaged in the manufacturing of sugar as well as its associated products such as rectified spirit, extra neutral alcohol, ethanol, incidental cogeneration of power, etc.

Interestingly, the stock is part of Dolly Khanna’s portfolio as the latest shareholding pattern shows that she holds 1.26% stake in the company as of September 2023.

The company currently trades at 37 with a market cap of 4.2 billion (bn).Ahmedabad Investment

In the past three months, shares of the company have seen a decent rise, in line with the rally witnessed in other sugar stocks.

In the past one year, the stock is up around 70%.

KCP Sugar & Industries Share Price – 1 Year Performance

Sugar stocks overall have seen a decent rise in the quarter gone by as increase in sugar prices boosted the demand.

Reportedly, sugar prices got a boost as limited rainfall in India’s key growing regions raised production concerns for the upcoming season. Higher sugar price is expected to improve margins of sugar-producing companies like KCP Sugar.

The other reason why shares are on an uptrend is because of its strong Q1 results. The company reported a total income of 1.2 bn during the quarter under review as compared to 0.5 bn in the March 2023 quarter.

It also turned profitable and posted a net profit of 306.8 million (m) as against a net loss of 84.7 m in March 2023 quarter and a net loss of 14.3 m in the year ago quarter.

Taking into account better future prospects due to the ethanol story, the company’s performance in the coming years is expected to improve.

The company is present in this domain since decades and enjoys a strong relationship with farmers due to long standing presence in the region.

As part of diversification and not relying on single source of income, the company has also forayed into processing of Urad Dal with installed capacity 22,000 MT.

The revenue contribution from this division is yet to make an impact on overall numbers.

Going forward, the company also has plans to foray into engineering and chemicals manufacturing segments.

Next on this list is Dollex Agrotech.

Indore based Dollex Agrotech is engaged into trading and manufacturing of sugar and jaggery from its manufacturing plant located in Madhya Pradesh.

It procures sugarcane which is the key raw material from the local farmers and sells majority of its product domestically.

Shares of the company currently trade at 39 with a marketcap of 97.4 m.

The company was listed in December 2022 on the NSE. Since listing, it has gained 13%.

Coming to its financials, the company has posted strong growth in the past five years.

It’s one of those companies having a double digit ROE and ROCE of 16% and 12.7%, respectively as of FY23.

The company has even brought down its debt in the past four years and its current debt to equity stands at 0.9x.

In its FY23 annual report, the company has listed multiple tailwinds that could work in its favour as the sugar industry grows overall and as the ethanol blending also happens.

It remains to be seen how Dollex Agrotech takes a part in the ethanol megatrend and captures a slice of the pie.

Third on this list is Dwarikesh Sugar.

From humble beginnings in 1993 with a single plant of capacity 2,500 TCD, the company has come a long way in becoming one of the leading sugar manufacturers in India.Pune Investment

The company has been raising the crushing capacity regularly and the capacity has since been increased to 21,500 TCD.

Dwarikesh Sugar currently trades at 91 with a marketcap of 17.1 bn.

It more or less trades near the same level it was trading a year ago.

Shares of the company have fallen in the past few weeks in line with broader market and because of its Q2 performance.

In the second quarter of FY24, the company’s profit parameters were negatively affected by an additional levy obligation imposed by the state government. This levy treated both B and C heavy molasses equally, despite the fact that they have different potential ethanol outputs.

According to the company’s filing, this has led to an additional expense of 199.2 m during the same time. This has also deprived the company of the opportunity to convert the molasses into ethanol, which is a more profitable.

Going forward, the performance is likely to be upbeat due to steady sugar realisations and higher volumes from the distillery segment.

The sales volume of industrial alcohol has also gone up this year. The company is hoping to leverage this given its forward-integrated operations.Simla Stock

Next on the list is Kothari Sugars.

The company is an integrated sugar company with units at Kattur and Sathamangalam in Tamil Nadu. It has a combined capacity of 6,400 TCD.

It also has a distillery capacity of 60 KLPD and a total power co-generation capacity of 33 MW.

Kothari Sugars share price currently trades at 50 with a marketcap of 408.2 m.

It has gained around 10% in the past one year.

In FY23, the company posted its best ever performance in terms of revenue and net profit. It looks set to surpass that feat in FY24 going by its numbers so far this financial year.

It has also reduced debt. The debt to equity currently stands at 0.2x.

Due to its established presence in the industry for more than 70 years, the company has a diversified customer base and healthy relationships with sugarcane farmers.

Last on this list is Rana Sugars.

The company is engaged in the business of manufacturing sugar and allied businesses of cogeneration and distillery.

Rana Sugars pioneered manufacturing of sugar from sugar beet in India. It set up India’s first sugar beet processing facility at its Amritsar facility.

Rana Sugars share price currently trades at 25 with a marketcap of 3.8 bn.

The stock has gained around 15% in the past one year. In the past one month, the share price is down over 10%.

The company’s distillery units provide alternate revenue stream against the cyclicality of its sugar business.

It also has long-term power purchase agreements (PPA) with the state grids of Punjab and UP. The 102-MW installed co-generation power unit is used captively as well as for exports under the long-term PPAs.

Currently, the company is focussing partly on ethanol and shifting the sugar manufacturing activities towards ethanol manufacturing to earn better margins.

The world is on the cusp of a massive energy revolution. People are going green like never before, shifting from fossil fuels to cleaner, more sustainable sources such as ethanol. Sugar companies are benefiting from this megatrend in a big way.

After the government established the Ethanol Blended Petrol (EBP) programme, the sugar industry became more valuable to investors.

India is set to become the third largest market for ethanol by 2026 after US and Brazil. This increase in demand is expected to continue for some time now. But not for too long.

As the electric vehicle (EV) industry establishes itself, the need for fuel will reduce.

However, it will take some time for the EV industry to operate in a full-fledged manner in IndiaJaipur Stock. Until then, ethanol is India’s only way to reduce carbon emissions.

Despite having so many compelling reasons, you should be cautious about investing in top sugar stocks.

The sugar industry is cyclical in nature and is heavily dependent on climatic conditions. It is also a highly regulated industry, as sugar is an essential commodity.

Happy Investing!

Disclaimer:This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

Simla Investment

Gold

Ahmedabad Wealth Management：AMC Stocks – Asset Management Company Stocks in India

AMC Stocks – Asset Management Company Stocks in India

AMC stocks refer to shares of Asset Management Companies, which manage investment portfolios for individuals, institutions, and businesses. These firms generate revenue by charging fees based on assets under management (AUM). Investing in AMC stocks offers exposure to financial markets, benefiting from rising AUM and market performance.

The table below shows the asset management company stocks in India based on the highest market capitalisation and 1-year return.

The Market Cap of HDFC Asset Management Company Ltd is Rs. 94,373.21 crores. The stock’s monthly return is 11.18%. Its one-year return is 79.81%. The stock is 2.90% away from its 52-week high.

HDFC Asset Management Company Limited serves as a mutual fund manager, offering asset management services to HDFC Mutual Fund as well as providing portfolio management and advisory services to clients.

Their range of products includes various investment options, such as mutual funds, portfolio management services, and alternative investment opportunities designed to meet the diverse needs of their customers. The company also offers financial management, advisory, brokerage, and consulting services, with a widespread network of 228 investor service centers in over 200 cities.

The Market Cap of Nippon Life India Asset Management Ltd is Rs. 43,484.67 crores. The stock’s monthly return is 13.67%. Its one-year return is 110.35%. The stock is 7.60% away from its 52-week high.

Nippon Life India Asset Management Limited is a company that specializes in managing various types of funds, including mutual funds and managed accounts. It serves as the investment manager for Nippon India Mutual Fund.

The company also provides advisory services for equity and fixed-income funds in Japan and Thailand, manages offshore funds through its subsidiary in Singapore, and has a representative office in Dubai to serve investors across Asia, the Middle East, the United Kingdom, the United States, and Europe. Its subsidiaries include Nippon Life India Asset Management (Singapore) Pte. Ltd. and Nippon Life India AIF Management Limited.

The Market Cap of Aditya Birla Sun Life Asset Management Company Ltd is Rs. 20,910.06 crores. The stock’s monthly return is 11.79%. Its one-year return is 77.83%. The stock is 6.83% away from its 52-week high.

Aditya Birla Sun Life AMC Limited, an India-based company, specializes in offering asset management services to Aditya Birla Sun Life Mutual Fund. The company oversees the investment portfolios of the mutual fund and serves as an investment manager for Aditya Birla Real Estate Debt Fund.

Additionally, it offers portfolio management services (PMS) and investment advisory services to offshore funds and high-net-worth individuals. Subsidiaries of the company include Aditya Birla Sun Life AMC (Mauritius) Limited, Aditya Birla Sun Life Asset Management Company Pte. Limited in Singapore, and Aditya Birla Sun Life Asset Management Company Limited in DIFC, Dubai.

The Market Cap of UTI Asset Management Company Ltd is Rs. 16,505.40 crores. The stock’s monthly return is 27.75%. Over the course of one year, the return stands at 62.03%. The stock is currently 1.82% below its 52-week high.

UTI Asset Management Company Ltd, based in India, specializes in asset management services, portfolio management, advisory services, and acting as a point of presence for National Pension System (NPS) subscribers.

The company manages a wide range of assets, including domestic mutual funds, portfolio management services, international business, retirement solutions, and alternative investment assets. UTI provides portfolio management services to institutional clients and high-net-worth individuals, offering discretionary services to organizations such as the Employees Provident Fund Organization, while providing non-discretionary services to Postal Life Insurance and advisory services to various offshore and domestic accounts.

The Market Cap of Shriram Asset Management Co Ltd is Rs. 665.88 crores. The stock’s monthly return is -16.77%. Its one-year return is 133.42%. The stock is currently 36.25% away from its 52-week high.

Shriram Asset Management Company Limited, an asset management firm based in India, specializes in managing Shriram Mutual Fund’s assets. A member of the Shriram Group, the Company operates solely in India and offers a range of financial services, including commercial vehicles, consumer finance, insurance, stock broking, and chit funds. Additionally, it serves as the investment manager for Shriram Mutual Fund.

The Market Cap of Dharni Capital Services Ltd is Rs. 91.05 crores. The stock’s monthly return is 0.45%. Its one-year return is 86.25%. The stock is 17.00% away from its 52-week high.

Dharni Capital Services Limited is an India-based financial services provider, specializing in investment advisory services. The company offers a wide range of services, including mutual funds, insurance, real estate, home loans, financial advisory, equity investments, and accounting and assurance services.

Catering to diverse financial needs, it provides investment management, financial planning, income tax, accounting, and business advisory solutions. Its home loan division manages the entire process from application to disbursement.

The Market Cap of Escorp Asset Management Ltd is Rs. 75.45 crores. Its one-year return is -4.41%. The stock is 26.70% away from its 52-week high.

Escorp Asset Management Limited is an India-based company specializing in portfolio management services (PMS). It offers a range of services, including non-institutional portfolio management, investment advisory, research services, personal finance advisory, and institutional asset management.

The company’s PMS includes investments in stocks, fixed income, debt, cash, structured products, and other individual securities. PMS offerings include discretionary, non-discretionary, and advisory services. In discretionary PMS, the portfolio manager makes and executes investment decisions. In non-discretionary PMS, the investor retains decision-making control, while the portfolio manager executes trades.

The Market Cap of Vedant Asset Ltd is Rs. 19.28 croresAhmedabad Wealth Management. The stock’s monthly return is 72.45%. Its one-year return is 46.33%. The stock is 39.20% away from its 52-week high.

Vedant Asset Limited is an India-based financial services provider offering a diverse range of products, including mutual funds, insurance, loans, and Aadhaar-enabled payment services (AEPS). Its mutual fund offerings cover top equity, hybrid, debt, ELSS funds, retirement planning, and children’s investments.Mumbai Investment

The company provides various insurance options, including bike, car, health, and life insurance. Bike insurance types include comprehensive, standalone, and third-party cover. Vedant Asset also offers loans such as personal, business, home, loans against property, and professional loans, including those for doctors.

AMC stocks refer to shares of AMC Entertainment Holdings, a prominent American movie theater chain. The company gained significant attention in 2021 due to heightened interest from retail investors, particularly during the GameStop trading frenzy, leading to a surge in stock prices.

Investing in AMC stocks can be seen as a gamble due to the volatility and unpredictability of the market. Factors such as changes in consumer behavior, the impact of streaming services, and the overall recovery of the entertainment industry influence the stock’s performance.

The key feature of Asset Management Company (AMC) stocks is Market Volatility Sensitivity. AMC stocks can experience higher volatility during market fluctuations, as their revenues depend on asset management fees.

1. Performance-Linked Earnings: AMC stocks’ returns are closely tied to the performance of their managed portfolios. Positive market conditions boost assets under management, directly impacting the company’s revenue, which in turn influences the stock’s performance.

2. Operational Efficiency: Return over 6 months may also reflect the operational efficiency of the AMC. Companies with low operational costs and effective resource management tend to provide better returns, even in short periods.

3. Fee Structures Impact: The fee structure of the AMC affects its stock returns. Companies with competitive fee structures that attract more investors may show higher AUM growth, positively impacting the stock price over six months.

4. Macroeconomic Influence: AMC stocks are often influenced by macroeconomic factors like interest rates and inflation. Over a six-month period, favorable macroeconomic conditions can contribute to higher returns, while negative trends may dampen stock performance.

The table below shows the top 10 asset management companies in India based on 5-year net profit margin.

The table below shows the top AMC stocks based on a 1-month return.

The table below shows the list of asset management company stocks in India based on 5-year Avg Net Profit Margin.

The table below shows the AMC stocks based on dividend yield.

The table below shows the historical performance of AMC stocks based on 5-year CAGR.

The factor to consider when investing in asset management company stocks in India is the company’s track record. A well-established history of delivering consistent returns and managing risks efficiently is key to long-term profitability.

Market Position: An asset management company’s market position indicates its competitive edge. Companies with strong brand recognition and substantial assets under management (AUM) tend to offer greater stability and potential for growth.

Regulatory Compliance: Assess the company’s adherence to regulatory standards. Asset management firms must follow strict regulations in India, and those with robust compliance measures are less likely to face legal or financial setbacks.

Investment Strategy: Review the company’s investment philosophy and portfolio management strategy. A well-diversified and adaptable approach can provide better risk management and performance across different market cycles, enhancing your investment’s resilience.

Fee Structure: Understand the fee structure charged by the asset management company. Lower management fees can boost net returns for investors, but always balance this against the performance to ensure you’re getting value for money.

Technology Adoption: Consider how well the company integrates technology into its operations. Firms that leverage technology for data analysis, client service, and risk management often offer better transparency, efficiency, and overall performance for investors.

To invest in AMC stocks in India, you need to open a Demat account with a broker like Alice Blue. Once registered, search for AMC stocks, analyze market trends, and place buy orders through the trading platform. Monitor your investments regularly and make informed decisions based on market performance.

Market trends significantly impact Asset Management Company (AMC) stocks in India. When the market experiences bullish trends, AMCs generally benefit from increased investor participation and higher assets under management (AUM), which can drive stock prices up. Conversely, during bearish phases, reduced investment inflows and lower AUM can negatively affect AMC stock performance.

Economic conditions also play a crucial role. Factors such as interest rates and inflation influence investor behavior and, consequently, the performance of AMCs. For instance, rising interest rates might lead to a shift from equities to fixed-income investments, impacting AMCs.

Additionally, regulatory changes and market sentiment affect AMC stocks. Positive reforms and favorable regulations can boost investor confidence, enhancing AMC stock values. Keeping an eye on these trends helps investors make strategic decisions regarding AMC investments.

Understanding the performance of AMC shares during periods of market instability is crucial for investors. Volatility can lead to significant fluctuations in stock prices, influenced by factors such as trading volume and investor sentiment. In times of uncertainty, AMC stocks may experience dramatic ups and downs.

The company’s ties to the entertainment industry and ongoing changes in consumer behavior can further impact their value. Analyzing historical data and market reactions can provide valuable insights into navigating investments in AMC during turbulent times.

The primary advantage of investing in Asset Management Company (AMC) stocks in India is Diverse Investment Opportunities. AMCs offer access to a wide range of investment products, including equities, bonds, and mutual funds.

1. Professional Management: AMCs employ experienced fund managers who conduct in-depth research and analysis. Their expertise in managing investments can lead to better portfolio performance, making AMC stocks an attractive option for investors seeking professional management.

2. Regular Income through Dividends: Many AMCs provide dividends to their shareholders, offering a steady income stream. This can be particularly appealing to income-focused investors looking for consistent cash flow in addition to potential capital appreciation.

3. Growth Potential: As the Indian financial market expands, AMCs stand to benefit from increased investor participation and higher assets under management. This growth potential can drive stock value appreciation, making AMC stocks a compelling investment choice.

4. Liquidity: AMC stocks are typically traded on major exchanges, providing liquidity to investors. This means investors can buy or sell shares with relative ease, offering flexibility and the ability to react to market conditions.

5. Regulatory Oversight: The Indian financial market is regulated by authorities such as SEBI, ensuring transparency and protecting investors’ interests. This regulatory framework enhances the credibility and stability of AMC stocks, contributing to their appeal as a reliable investment.

The main risk of investing in AMC (Asset Management Company) stocks in India is market volatility. AMC stocks are susceptible to fluctuations in the broader financial markets, which can affect their performance and value unpredictably.

Regulatory Changes: Regulatory changes can impact the operations of AMCs. New regulations or amendments can alter the way AMCs manage funds, affect their profitability, or impose additional compliance costs, thereby influencing stock performance.

Market Fluctuations: AMC stocks are heavily influenced by market fluctuations. Economic downturns or volatility in financial markets can lead to decreased asset values, reducing returns for investors and potentially leading to stock price declines.

Economic Conditions: Broader economic conditions significantly affect AMCs. Economic slowdowns, inflation, or changes in interest rates can impact investment performance and reduce the attractiveness of AMC stocks, leading to potential declines in stock value.

Competition: Intense competition among AMCs can affect profitability. If an AMC fails to differentiate itself or maintain a competitive edge, it may lose market share, which can negatively impact its stock performance and investor returns.

Management Quality: The quality of an AMC’s management is crucial. Poor management decisions or lack of strategic vision can lead to underperformance, impacting investor confidence and stock value negatively. This risk is intrinsic to the company’s operational success.

Investing in Asset Management Company (AMC) stocks can significantly enhance portfolio diversification. AMCs often manage a variety of assets, including equities, bonds, and real estate, providing investors with exposure to multiple sectors and asset classes within a single investment. This diversification can help spread risk and potentially reduce portfolio volatility.

Additionally, AMC stocks can offer investors the opportunity to benefit from the expertise of professional managers who actively make investment decisions. By including AMC stocks in your portfolio, you gain access to their specialized knowledge and strategic asset allocation, which can further strengthen your investment strategy.

Investing in asset management company (AMC) stocks in India can offer significant opportunities for growth and income. These stocks are suitable for investors seeking to capitalize on the expanding financial sector and benefit from diversified investment strategies.

Long-term Investors: Individuals with a long-term investment horizon looking for steady returns should consider AMC stocks. They offer potential growth as asset management firms expand their portfolios and services.

Diversification Seekers: Investors aiming to diversify their portfolios will find AMC stocks appealing. They provide exposure to a broad range of assets managed by the company, helping mitigate risk through diversification.

Growth-Oriented Investors: Those interested in capitalizing on the growing financial market should invest in AMC stocks. As the Indian economy expands, AMCs are likely to benefit from increased assets under management and higher earnings.

Income Investors: Investors looking for regular income may find AMC stocks attractive. Many AMCs distribute a portion of their profits as dividends, offering a steady income stream in addition to potential capital gains.

We hope you’re clear on the topic, but there’s more to explore in stocks, commodities, mutual funds, and related areas. Here are important topics to learn about.

Pune Wealth Management

Wealth

Bangalore Investment：Bitcoin prices surge post-Cyprus bailout

Bitcoin prices surge post-Cyprus bailout

The price of one bitcoin has popped 87% since Cyprus began discussing tapping deposits as part of the bailout by the EU and IMF. Bitcoins now trade at $88 each, up from $47 on March 16, 2013, according to data from Mt. Gox, the currency’s main trading exchange. That compares with just 5 cents per bitcoin in mid-July 2010, when Mt. Gox first started tracking prices.

Trading volume has also exploded. Between 60,000 and 110,000 bitcoins have changed hands per day recently, according to MtBangalore Investment. Gox. That’s double to triple the amount traded a few weeks ago.Agra Wealth Management

Albert Hendriks, a 32-year-old programmer for a high-speed trading firm in Amsterdam, jumped into the currency for the first time this week, purchasing €1000 worth of bitcoins. He’s not worried about the safety of the global banking system, but he sees bitcoins as a lucrative investment.

“I think the currency is maturing,” Hendriks said. “It’s risky, but I think more and more people are starting to trust it.”

Bitcoin investors can trade in their coins for cash through a number of sites like Coinbase and BitInstant that work directly with banks to facilitate transfersIndore Stock. Some vendors are starting to accept the coins too, including the blog hosting site WordPress and the online community Reddit.

Jeff Berwick, a media entrepreneur who runs the website Dollar Vigilante, hopes to open one of the world’s first bitcoin ATMs in Cyprus in the next few weeks. The ATM there would allow individuals to retrieve cash for their digital bitcoins or put cash into the machine to add to their bitcoin collection.

“It’s going to be an experiment,” said Berwick, who also aims to install a machine in Los Angeles in the next few weeks.

Bitcoin has been one giant global experiment since an anonymous developer using the pseudonym “Satoshi Nakamoto” created it in 2009 as a currency that’s free from government intervention and has no central bank backing. Bitcoin transactions typically carry very low exchange or processing fees.

As of now, nearly 11 million bitcoins are in circulation, making the current value of all outstanding bitcoins roughly $975 million.

These coins are “minted” by a network of computers running specialized software on powerful (and often pricey) hardware systems. The software is designed to release new coins at a steady — and finite — pace that slows down over time. Bitcoin’s algorithm caps the total number of bitcoins that will ever be created at 21 million. More than 99% of them will be circulating by 2033, but the very last bitcoin won’t be generated until around 2140.

“The point of the bitcoin is that you don’t have to trust the founder,” said Jeff Garzik, a computer programmer in Raleigh, N.C., who has served as a consultant to businesses working with bitcoins. “People are drawn to it because it can’t be artificially manipulated by any human. Central bankers can’t just decide to make more of it.”

Last week, the Treasury Department’s Financial Crimes Enforcement Network issued new guidelines outlining what anti-money laundering rules virtual currencies like bitcoin must follow. Critics say that the currency’s anonymity makes it particularly useful for money launderers. Members of Silk Road, an online drug bazaar, use it as their currency of choice.

Although bitcoin businesses now have more regulatory hoops to jump through, Garzik said he sees the new rules as a tacit acceptance by the U.S. government of the currency’s legitimacy.

Meanwhile, Hendriks hopes that he won’t ever have to exchange his newly purchased bitcoins for dollars or euros.

“I hope it will become a global currency, and I can use it without turning it back into another currency,” Hendriks said.

Pune Stock

Financial

Lucknow Wealth Management：Kotak said it has a cautious view on oil & gas PSUs. It suggested ‘Sell’ ratings on IOC, BPCL, HPCL, GAIL, Petronet LNG and Oil India. It has a ‘Reduce’ rating on ONGC.

Kotak said it has a cautious view on oil & gas PSUs. It suggested 'Sell' ratings on IOC, BPCL, HPCL, GAIL, Petronet LNG and Oil India. It has a 'Reduce' rating on ONGC.

Large and rising capex by oil & gas sector PSUs has been one of key reason why Kotak Institutional Equities has turned cautious on the sector’s prospects. Calling it a ‘curious case’, Kotak noted that while oil PSUs upped capex by three times over FY2019-24 in comparison with FY2005-09, returns from those investments have fairly been weak.

“Our near-term earnings estimates are optimistic and not much below consensus estimates, as we assume generous prices and margins. However, in the past, earnings have been volatile both on macro environment and government policiesLucknow Wealth Management. Despite the strong run-up of PSUs, the Street seems to be giving high multiples, and, in our view, ignores large capex with likely weak returns,” it said.

Kotak said it has a cautious view on oil & gas PSUs. It suggested ‘Sell’ ratings on IOC, BPCL, HPCL, GAIL, Petronet LNG and Oil India. It has a ‘Reduce’ rating on ONGC.

In the case of upstream companies, despite large capex, oil & gas production and reserves are declining. In refining, there is surplus capacity and creation of new capacity is questionable, Kotak Institutional Equities said adding that while Petchem is a new focus area for PSUs, but their track-record has been dismal.

“High capex has led to low free cash flow relative to PAT for PSUsJaipur Stock. Recently, PSUs have benefited from higher realisations, yet FCF remains weak. The market seems to be giving generous multiples to near-term elevated earnings and ignoring large capex with likely weak returns. Maintain cautious view on oil PSUs,” it said.

Kotak said conventional oil & gas sector is a sunset sector, and returns have been low. With pricing interventions and weak outlook, the private investment has slowedGuoabong Investment. However, PSUs’ capex continues to rise.

“Compared with the average annual capex of Rs 34,000 crore over FY2005-09, top 10 O&G PSUs’ capex rose 2 times to Rs 70,000 crore in 2009-14, 2.7 times to Rs 93,000 crore over FY2014-19 and 3.2 times to Rs 1.1 lakh crore in FY2019-24. With plans aggressive in core areas, most are diversifying into petchem, renewable, and new energy, where returns will be weaker. Thus, capex will likely keep rising, while returns will likely get weaker for O&G PSUs,” it said.

Kotak said most PSUs have benefitted recently with higher prices, realisations or margins.

In the case of upstream companies, net crude oil realisations (post wind-fall tax, royalty and cess) for FY2022-24 were 50 per cent higher versus FY2016-21 average. Similarly, APM gas prices were nearly 100 per cent higher versus FY2016-22 average.

In the case of OMCs namely as IOC, HPCL and BPCL, gross refining margins (GRMs) have been a puzzle and too good to believe, Kotak said.

“Reported GRMs have been at very high premium to benchmarks, or what their product slate suggests, accounting for Russian crude and better distillate cracks. While prices of petrol/diesel are frozen, the OMCs marketing margins have been elevated,” it said.

Agra Stock

Stock

Chennai Stock：Variable Annuities

Variable Annuities

Variable annuities are sold by prospectus only. You can request a prospectus by calling 866-663-5241(option 2) or you may view the Schwab Genesis Variable Annuity™prospectus, the Schwab Genesis Variable Annuity™ NY prospectus, the Schwab Retirement Income Variable Annuity® prospectus and the Schwab Retirement Income Variable Annuity® NY prospectus online. Before purchasing a variable annuity, you should carefully read the prospectus and consider the annuity’s investment objectives and all risks, charges, and expenses associated with the annuity and its investment options.

1Chennai Stock. Mortality, expense and administration charges on the Schwab Genesis Variable Annuity™ are 0.45%, with an additional fee of 0.20% for the Return of Purchase Payments Death Benefit, and 0.60%, with an additional fee of 0.20% for the Return of Purchase Payments Death Benefit, for the Schwab Retirement Income Variable Annuity®. Comparatively, according to an April 18, 2022 Morningstar survey of 2,344 non-group variable annuities, the industry average fee is 1.29%. This fee does not include the election of an optional Stepped-Up Death Benefit (in the case of the Schwab Retirement Income Variable Annuity), guaranteed lifetime withdrawal benefit, or underlying investment options. The underlying investment options carry an additional fee known as a fund, subaccount, or investment expense/fee.

2. Withdrawals in excess of the annual guaranteed income/guaranteed annual withdrawal amount or withdrawals prior to age 59½ may significantly and permanently reduce the protected payment/benefit base. Withdrawals of earnings are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal tax penaltyPune Stock. For nonqualified contracts, an additional 3.8% tax may apply on net investment income.

3Varanasi Wealth Management. Optional death benefits are not available if you select an optional living benefit. If you purchase an optional death benefit you will be unable to add and optional living benefit at a later date

Variable annuities are long-term investments intended for retirement planning and involve market risk and the possible loss of principal. Any withdrawals prior to 59½ may be subject to income tax and a 10% federal tax penaltyLucknow Investment. Investments in variable annuities are subject to fees and charges from the insurance company and the investment managers.

Charles Schwab & Co., Inc., a licensed insurance agency, distributes certain insurance and variable annuity contracts that are issued by insurance companies not affiliated with Schwab. Not all annuity contracts are available in every state.

Charles Schwab & Co., Inc. is a selling broker-dealer and general insurance agency and is not affiliated with the Protective Life Insurance Company, the Protective Life and Annuity Insurance Company or Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Contracts are sold by Charles Schwab & Co., Inc. (“Schwab”) through its representatives and by Schwab’s affiliated General Insurance Agencies. All individuals selling variable annuities must be licensed insurance agents and registered representatives.

Protective and Protective Life refer to Protective Life Insurance Company (PLICO) and its affiliates, including Protective Life and Annuity Insurance Company (PLAIC).

Protective Life does not offer or provide investment, fiduciary, financial, legal or tax advice or act in a fiduciary capacity for any client. Please consult with your investment advisory attorney or tax advisor as needed.

The Schwab Genesis Variable Annuity™ is issued by PLICO in all states except New York, and in New York they are issued by PLAIC. Securities offered by Investment Distributors, Inc. (IDI), the underwriter for registered products issued by PLICO and PLAIC, its affiliatesPune Wealth Management. PLICO is located in Nashville, TN; PLAIC and IDI are located in Birmingham, Alabama. Each company is solely responsible for the financial obligations accruing under the products it issues. Product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Schwab Genesis is a flexible, premium deferred variable and fixed annuity contract issued under policy form series VDA-P-2006 (PLICO) and VDA-A-2006-500 (PLAIC). SecurePay Life benefits provided by rider form number VDA-P-6057 (PLICO) and VDA-A-6059 (PLAIC). Policy form numbers, product availability and product features may vary by state. (WEB.3808565.04.22)

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York, and are issued in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.

New Delhi Investment

Investment

Lucknow Stock：Data breach hits 68,000 Texans, 800,000 nationwide at Texas life insurance servicer

Data breach hits 68,000 Texans, 800,000 nationwide at Texas life insurance servicer

Nearly 68,000 Texans and more than 800,000 people nationwide could be affected by a data breach at a Brownwood-based insurance servicer, according to filings with the Texas and Maine attorneys general offices.

Landmark Admin announced the breach on Oct. 23, and notices have been sent to those affected, according to the filingsLucknow Stock. Information potentially gathered includes names, addresses, dates of birth, social security numbers/tax identification numbers, driver’s license numbers/government-issued ID numbers, financial information such as credit card numbers, and medical and health insurance information.

Landmark offers third-party administration services for life insurance and annuity companies, including Liberty Bankers Insurance Group headquartered in Dallas. Liberty Bankers Insurance Group includes American Monumental Life Insurance Company, Pellerin Life Insurance Company, American Benefit Life Insurance Company, Liberty Bankers Life Insurance Company, Continental Mutual Insurance Company, and Capitol Life Insurance Company.

In a copy of the notice sent to those affected filed with the Maine attorney general’s office, Landmark said it received personal information from individuals who at one time were a producer, policy-owner, insured, beneficiary, or payor for insurance policies which Landmark administered, or continues to administer, for Liberty Bankers Insurance Group.

The Maine filings indicate that the breach occurred due to hacking and was discovered on May 13 when Landmark detected unusual activity in its system and promptly disconnected the affected systems and remote access to the network.

Landmark hired a third-party cybersecurity firm to secure the breach and conduct a forensic investigation, and during the investigation on June 17 the “unauthorized actor” regained access to Landmark’s system. Though the investigation confirmed that data was taken, it was not able to confirm which specific files were takenHyderabad Investment. As such, Landmark is notifying “all individuals whose private information may have been contained in its systems at the time of the incident,” on a rolling basis as they are discovered, with the first wave of notices having been sent out Oct. 23-24.

According to the filings, Landmark has taken steps to secure its systems in response to the data breach and is offering identity theft protection services through a third-company whose services include 12 months of credit and CyberScan monitoring, a $1 million insurance reimbursement policy, and ID theft recovery services.

The Federal Trade Commission advises that those affected by a data beach take advantage of identity theft services when offered, in addition to steps you can take yourself. These steps include ordering free credit reports to check for unrecognized accounts and placing a credit freeze for fraud alert to limit the ability of malicious actors to open new accounts in your name. You can find out more about how to recover from a data breach at identitytheft.gov/databreach.

Landmark Admin declined to comment at this time.

This story has been updated with a response from Landmark Admin.Related StoriesRead More

Kanpur Stock