Business Live: Stocks edge higher; Warren Buffett bets on gold


The benchmark stock indices have ticker higher to begin the week on a positive note.

Join us as we follow the top business news through the day.

2:00 PM

ICICI Securities enables Indian customers to invest in US capital markets

Brokers are cashing in on the speculative fever among retail investors.

PTI reports: “ICICI Securities on Monday said it has joined hands with Interactive Brokers LLC to offer its customers a facility to invest in the US markets through a complete digital experience from onboarding to trading.

Interactive Brokers Group is a 42-year-old, US-based Nasdaq-listed online brokerage, while ICICI Securities is a subsidiary of ICICI Bank.

The alliance will enable ICICI Securities’ more than 4.8 million clients to diversify their investments outside of the Indian market and access multi-asset investment opportunities through Interactive Brokers’ trading platform.

Domestic investors can now trade in US markets across stocks, exchange traded funds (ETFs) and fixed income products, ICICI Securities said in a statement.

There is no minimum ticket size and US markets even allow fractional ownership of shares, so even small retail investors can build a portfolio effectively, it added.

Investing in a matured and well-regulated market like the US provides exposure to well-known and well tracked international companies. We feel it is the right time to offer such a facility for our customers and are happy to join hands with Interactive Brokers,” said Vijay Chandok, MD and CEO, ICICI Securities.

“Together we will make investing in the US markets almost as seamless as it is investing in the domestic markets. The complete investment journey, right from account opening, broking, portfolio monitoring and statements will be offered seamlessly and digitally. Based on investor demand, the facility could be extended to other markets as well in the future,” he added.

Ankit Shah, director of Interactive Brokers’ Indian entity said many Indians have interest in investing in companies outside of India and in brands that they use every day. Indian investors will now be able to utilize Interactive Brokers’ platform and execution capability to make it happen.”

1:30 PM

Staff preference is for small, rural offices: Sridhar Vembu

Zoho Corp., which builds software for businesses, is creating a cluster of small rural offices that could each house about 25 people, so that no employee would need to travel more than 10-20 km. This model will be replicated in other districts and States, said its CEO Sridhar Vembu. Excerpts:

Zoho was among the first companies to ask employees to return to their hometowns even as the pandemic was beginning to set in. How did this come about?

It was more a precaution. I felt that it was clearly China followed by Italy that were affected by Covid. China, of course, already went through a serious crisis and I realised it was only a matter of time before it arrived in India, because in this globally connected world, it is impossible to keep all these out.

Most of our employees came from smaller towns. [So when they went back], we probably saved quite a few infections from coming up as they were in less crowded places.

 

1:00 PM

Warren Buffett bets on gold

 

12:30 PM

Captain Fresh raises USD 2.3 mn from investors to grow seafood supply chain biz

The new-age meat supply chain is witnessing some fresh investment.

PTI reports: “Freshwater fish and seafood supply chain platform Captain Fresh on Monday said it has raised USD 2.3 million (over Rs 17 crore) from investors, including Ankur Capital.

In pre-series A round of funding, Incubate Fund India and Silicon Valley-based angel investors also participated.

Captain Fresh leverages technology to deliver freshwater fish and seafood to retailers across all key formats.

“The fundraise will be used to invest in technologies like computer vision, IoT, bots, data analytics to digitise and drive efficiencies across the supply chain,” the company said in a statement.

Captain Fresh also plans to expand into new cities and increase headcount.

Captain Fresh was founded in April 2019 by Utham Gowda, an ex-investment banker.

Gowda said, “We started with a simple vision to build a fresh fish and seafood platform that the ecosystem could completely trust and rely on for their daily needs. We want to nurture our retail partners’ businesses by providing full availability, range and high-quality fresh supplies on a daily basis.”

The Bengaluru-based company received seed investments of USD 750,000 or over Rs 5 crore from Nekkanti Group and Sandhya Aqua, leading exporters of frozen shrimp.

It currently has presence in cities like Bengaluru, Mumbai, Pune and Hyderabad.

Its clientele base comprises 125-150 retailers in Bengaluru and two to three big players in Mumbai and Hyderabad each.

Krishnan Neelakantan, Partner at Ankur Capital, said: “With a billion aspiring Indians seeking to up the protein in their diet, we see a huge latent demand for fresh fish and seafood, already a USD 12 billion market, waiting to be unlocked.”

Nao Murakami, Founder and General Partner at Incubate Fund India said, “As Incubate Fund is a Japanese-origin fund, we can bring best practices in supply chain innovations and support potential collaborations between Captain Fresh and Japanese companies.””

12:00 PM

Decoding the SC verdict on right of daughters

The Supreme Court held that daughters like sons have an equal birthright to inherit coparcenary property and said the 2005 amendment made to the Hindu Succession Act of 1956 will have a retrospective effect. Rishabh Shroff, Partner, Cyril Amarchand Mangaldas explains the implications of the verdict.

What was the 2005 amendment?

The amendment was passed in 2005 to confer equal status to both sons and daughters of coparceners. Prior to the amendment, coparcenary rights were granted only to sons of a coparcener.

Who is a coparcener?

A coparcener is one who acquires rights to their father’s property upon birth and can claim a partition of the coparcenary at any time.

11:30 AM

Japan’s economy shrinks 27.8%

11:00 AM

Rupee 8 paise higher at 74.82 against U.S. Dollar in early trade

The Rupee gained 8 paise to 74.82 against the U.S. Dollar in opening trade on Monday tracking positive domestic equities and weak American currency.

At the interbank forex market, the domestic unit opened at 74.86 against the U.S. Dollar, gained further ground and touched 74.82 against the U.S. Dollar, registering a gain of 8 paise over its previous close.

It had settled at 74.90 against the U.S. Dollar on Friday.

“Asian currencies are stronger against the USD. Rupee is likely to continue to trade sideways. Likely range for today is 74.79-75.00,” said Abhishek Goenka, Founder and CEO, IFA Global.

 

10:40 AM

Reliance in talks to buy online furniture retail, milk delivery startups – report

RIL’s buying spree amid the pandemic continues unabated.

Reuters reports: “India’s Reliance Industries Ltd is in talks to buy online furniture retailer Urban Ladder and milk delivery firm Milkbasket to strengthen its e-commerce business, the Times of India newspaper reported on Monday.

The oil-to-telecoms conglomerate’s talks with Urban Ladder are at an advanced stage, the report said, citing four unnamed sources briefed on the matter. A deal could be pegged at around $30 million, it said, citing one of the sources.

Representatives at Reliance, Urban Ladder and Milkbasket did not immediately respond to Reuters requests for comment.

The news comes as the COVID-19 pandemic forces many Indians indoors, spurring a wave of online shopping, including for daily groceries such as milk.

Reliance, led by Asia’s richest man, Mukesh Ambani, launched an online grocery service JioMart in May, a move rivalling Amazon.com Inc and Walmart Inc’s Flipkart in India, a key growth market for e-commerce.

Ambani has raised more than $20 billion in the past few months, including from Facebook and Alphabet’s Google , for Reliance’s digital arm, Jio Platforms.

The Times of India report said, citing a source, that Milkbasket had held talks with Amazon and Alibaba-backed online grocery retailer BigBasket, but the discussions did not result in a deal due to a mismatch in valuation expectations.”

10:20 AM

A multiple-asset strategy can help drive higher returns

The importance of allocation of investments to multiple asset categories such as equity, debt and others continue to be discussed, but it tends to get missed out in implementation. A case in point, over the last one year, the two asset classes that have given highest returns are international equity and gold.

Returns have been 48% from gold over last one year, including the rupee depreciation. U.S. equities, over the last one year, have given 20% returns. Investors have been underallocated to these two assets. Overall allocation in the Mutual Fund industry i.e. assets under management may be taken as an indicator.

What we see is in the industry AUM of ₹25.5 lakh crore as on June 2020, the AUM of Gold ETFs is ₹10.4 thousand crore and that of feeder funds investing overseas is ₹3.8 thousand crore. That is, exposure to Gold ETFs and overseas funds, the ones that have run up this year, at ₹14.2 thousand crore is about 0.5% of the overall AUM. This is not an absolute indicator as there are other avenues for investment than Mutual Funds, but this gives us a perspective. The point is not to predict how much return would come from one asset class, but to follow a discipline in allocation of funds.

 

9:45 AM

Indian shares cheer PM Modi’s promise on COVID-19 vaccines

A good start to the week for stocks on increasing hopes of vaccines putting an end to the pandemic soon.

Reuters reports: “Indian shares rose on Monday as Prime Minister Narendra Modi’s assurance on mass production of COVID-19 vaccines and more infrastructure spending by the government boosted sentiment.

The NSE Nifty 50 index was up 0.42% at 11,219.35 by 0350 GMT, while the S&P BSE Sensex was up 0.27% at 37,960.61.

“Along with mass-production, the roadmap for distribution of vaccine to every single Indian in the least possible time is also ready,” Modi said in his Independence Day speech on Saturday.

He reiterated plans to improve the country’s infrastructure by spending more than 110 trillion ($1.47 trillion) rupees on around 7000 projects.

In Mumbai trading, all major sectoral indexes were trading higher.

The Nifty Infrastructure Index advanced 0.57% in early trade, led by a 2.1% rise in conglomerate Larsen & Toubro Ltd.

Only five stocks on the Nifty 50 index were in the red early on Monday. Shares of Tata Motors Ltd and Reliance Industries Ltd slipped 2.5% and 1.2%, respectively, and were the top losers on the index.

Meanwhile, India continues to see a rise in coronavirus cases, with the tally reaching 2.65 million and deaths crossing 50,000, as of Monday.”

 

9:15 AM

Watch | Why did gold prices spike in July?

Gold prices in India and around the world continued to hit new highs in July 2020. The precious metal surged 28% this year to more than ₹50,000 per 10 grams.

Government measures to ease the economy, as seen in different parts of the world , resulted in appreciation in the price of assets like gold.

The price rise dampened retail demand for gold in India which is the world’s second largest consumer of the precious metal

The rising number of COVID-19 cases, along with the weakness in the U.S. dollar, was the driving force behind the surge in precious metal prices.

 





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