It may sound strange but with the US and its allies France and UK targeting Syria, difficult times are ahead for India. Oil prices which are on the rise

will scale further highs putting the Indian economy in greater trouble. International oil prices have breached $73 a barrel – the first time to do since 2014. Though there are no clear indications about where oil prices will settle, some estimates predict that prices will go upwards for the next 2 years. Analysts safely project that global oil prices may hover upwards of $70 and below $80 over this period. If tensions escalate oil prices might go up to $100 a barrel with geo politics dominating over the demand – supply scenario. Syria is a very miniscule oil producer but is in the neighbourhood of Iraq, a major oil producing nation. Saudi Arabia and Iran – other major oil players — are in the extended neighbourhood. Moreover with Russia (another major oil pro-ducer caught in the conflict because it is siding with Syria) involved, things can turn murky and the situation could go out of control.

82 per cent of India’s petroleum needs are import-ed, so India’s import bill will rise. But to some extent the government can step in to help consumers: this by moderating the increase in domestic oil prices by lowering the taxes on petroleum products. This is now upwards of 45 per cent and the government can help by moving petroleum products to the ambit of GST. Even if petrol and petroleum products are put on the highest bracket of GST of 28 per cent, this will lead to a sharp fall in the retail prices of petrol and diesel which is now at an all- time high. On April 12, petrol prices varied between Rs 73.94 and Rs 81.80 per litre in the metro cities of India. A decision can be taken not by the central government but by the

GST Council that has representation from all states. With revenue objectives high on their priority, state governments (notwithstanding their lip sympathy for the masses) have been chary of reducing taxes on petroleum products. Besides central excise duty, state excise duty or VAT is also levied on petroleum products. The latest Economic Survey has pointed out that rising oil prices are one of the biggest risks to the Indian economy crimping growth and spending.

The rupee suffered a setback in the week ended April 13 against the US counter-part after surging crude prices flagged

risks from widening current account deficit and renewed inflation fears amid worsening geopo-litical environment.

Reversing a brief recovery trend, the home currency closed the week lower by 23 paise at 65.20 against the USD.

On April 16, the rupee plunged further 29 paise or 0.44 per cent to close at a six-month low of 65.49 against the US currency.

The forex market witnessed extreme volatility against the backdrop of escalating geopolitical tensions with worries about Western military intervention in Syria alongside impending trade dispute between the US and China, despite bull-ish local equities.

Your Personal Finance Advisorwww.thefinapolis.com

18th - 24th April 2018 | 01

FinapolisTheThe

FinapolisCrude shoCk! Will india suffer from syrian strikes? Kingshuk Nag

4 SENSEXY: Jilted Lover & Arrogant Investor 5 Mutual Funds May Be Sold On

eCom Platforms: AMFI 6 Silver Prices Miss the Bling 7Confused About Your

Risk-Taking Capacity?

Geo political tensions strengthen case to bring petrol products under GST ambit Rupee Suffers Fresh Blow

Turn to Page 3 Turn to Page 3

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Comfort cue from IIP,inflation numbers

India paces ahead in the Index of Economic Freedom

Bourses, Sebi to consult on SGX listing move

Infy kicks off result season with a bang

15th Finance Commission’s ToR sparks protests

Reflecting improvement in the economic situation, industrial production grew by a healthy

7.1 per cent in February while the key retail inflation slipped to a five-month low of 4.28 per cent in March.

The uptick in industrial production has been driven largely by the robust performance of the manufacturing sector coupled with higher offtake of capital goods and consumer durables. Retail inflation based on the Con-sumer Prime Index (CPI) moderated in March due to easing food prices, including vegetables.

The Index of Industrial Production (IIP) had grown by 1.2 per cent in February 2017.

It had recorded a growth of 8.54 per cent in November, 7.1 per cent in De-cember and 7.4 per cent in January, as per the revised data.

Reacting to the macroeconomic data, commerce and industry minister Suresh Prabhu said in a tweet: “The IIP for the manufacturing sector in Feb-ruary 2018 stands at 130.1 which is 8.7 per cent higher than in Feb 2017 with fifteen out of the twenty three industry groups showing positive growth. Eco-nomic indicators continue to reflect the Indian growth story! IIP in February 2018 stands at 127.7, which is 7.1 per cent higher as compared to the level in the month of February 2017.”

Economic affairs secretary Subhash Chandra Garg tweeted: “Another very good IIP growth number came out today. For Feb 2018, IIP rose by 7.1%. Manufacturing grew by 8.7% marking fourth month of growth over 8.5%. Capital goods grew by 20% with last three months growth being over 15%.”

The Centre has suggested to the finance commission to consider incentivising states working on

population control, said Prime Minister Narendra Modi while refuting charges that the Terms of Reference of the 15th Finance Commission were biased against certain states.

Modi’s remarks came within days after CPI-M-ruled Kerala hosted a con-ference of finance ministers of south-ern states, which was also attended by Puducherry, a union territory.

At the conclave, Kerala, Karnataka,

The country’s second-largest software services major Infosys reported a 2.4 per cent growth in

consolidated net profit at Rs 3,690 crore for the quarter ended March 31. It had posted a net profit of Rs 3,603 crore in the year-ago period.

Revenues of the firm grew 5.6 per cent to Rs 18,083 crore in the Janu-ary-March quarter against Rs 17,120 crore in the year-ago period. Infosys expects revenue for 2018-19 to grow in the range of 6-8 per cent in constant currency terms and 7-9 per cent in US dollar terms. Infosys rewarded its investors with a record 870 per cent ag-gregate dividend or Rs 43.50 per share of Rs 5 face value for fiscal 2017-18.

India has jumped 13 places in the last one year to the 130th spot in the latest annual Index of Econom-

ic Freedom released by The Heritage Foundation, an American conserva-tive public policy think-tank based in Washington.

In 2017, India with a score of 52.6 points ranked at 143 among 180 countries. This year, India’s economic freedom score is 54.5.

“Its overall score has increased by 1.9 points, led by improvements in judicial effectiveness, business freedom, gov-ernment integrity and fiscal health.

India is ranked 30th among 43 coun-tries in the Asia–Pacific region and its overall score is below the regional and

With the Singapore Ex-change announcing listing of new Indian equity de-

rivatives products in June, the NSE said it would discuss the matter with markets regulator Sebi and other exchanges to decide the course of action.

The National Stock Exchange (NSE) is examining the SGX’s matter and has asked for more details from the overseas bourse on the product structure.

New Delhi

Bengaluru

Washington

IDBI Bank to pay penalty fornon-compliance

The RBI imposed a penalty of Rs 3 crore on IDBI Bank for non-compliance to the Income

Recognition and Asset Classification norms. The penalty would not have any material impact on the bank. The fine has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to RBI’s directions.

New Delhi

New Delhi

Chennai

Andhra Pradesh and Puducherry had opined that ToR were in contradiction to the principles of federalism enshrined in the Constitution and would also result in revenue loss to performing states.

world averages,” it added. Noting that India is developing into

an open-market economy, the Index said traces of its past autarkic policies still remain.

In February, leading stock exchanges -- Bombay Stock Exchange, Nation-al Stock Exchange and Metropolitan Stock Exchange of India -- announced the decision to stop providing data feeds to overseas exchanges, as part of a joint effort to stymie migration of liquidity to overseas markets.

The NSE’s reaction comes after SGX said it would list new India equity de-rivative products in June this year.

NSE said the bourses need to assess whether the products announced by SGX are compliant with the announce-ment made by them in February.”

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It said that a $10 barrel increase in oil prices reduces growth by 0.2-0.3 per cent, increases wholesale price index by 1.7 per cent and worsens the current account deficit by $9-10 billion.

Global oil prices are on the ascent not just because of the Syrian developments but due to a decision by the Organiza-tion of Petroleum Exporting Countries (OPEC) to curtail production with a view to force prices up. A decision was taken on November 30, 2017 to this effect to cut production to 32.5 million barrels a day and keep it effective for a year. Russia is also believed to be working in tandem with OPEC.

The only way to keep OPEC prices under check is through an alternative global oil source: Oil shale. The US sits on a huge reserve of oil shale (estimat-

ed to be at 1.3 to 3 trillion tons) and exploiting oil shale to produce it has the potential to convert US into an oil exporting country within a few years. In fact, it is this fear of being

over-whelmed

by shale oil that Saudi Ara-

bia (the leader of OPEC) had

abandoned its earlier policy of keeping oil

prices sky high and re-laxed production norms

in 2014 – only to reverse it now. In June 2014, the price of oil was

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us takes Big strides in shale oil extraction

Uneasiness roared back into domes-tic currency market as overall senti-ment turned into dismay after a rapid surge in global crude prices rekindled fiscal slippage and inflation.The rupee revisted a fresh one-month high of 64.85 at the start of last week, retreated sharply to a five-month low of 65.45 during the mid-week cri-sis, but eventually pulled back some losses.

At the Interbank Foreign Exchange (forex) market, the rupee opened higher at 64.85 from April 6 close of 64.97 on sustained dollar unwinding by exporters and banks.

It later broke down its consolidation phase and tumbled to a fresh five-month low of 65.45 on panic dollar demand from state-run banks and importers.

However, some dol-lar demand towards the fag-end trade helped the rupee to recover some lost ground before settling at 64.20, revealing a loss of 23 paise, or 0.35 per cent.

The Indian currency also experi-enced sharp volatility against British pound, euro and Japanese yen and ended with steep losses.

The RBI had fixed the reference rate for the dollar at 65.2226 and for the euro at 80.3412.

In the meantime, the country’s for-eign exchange reserves rose by USD

503.6 million to touch a life-time high of USD 424.864 billion in the week to April 6, aided by increase in foreign currency assets.

In the international energy front, global crude prices skyrocketed, post-ing their largest weekly gain since July after U.S. President Donald Trump’s comments about possible military ac-tion in Syria and reports of dwindling global oil stocks.

Rising geopolitical concerns along-with declines in Venezuela’s crude oil production also supported the rally.

Benchmark Brent crude was up 58 cents at USD 72.60 a barrel and also

set for a weekly gain of more than 8 percent going back to July.

On the global front, the US dollar

was little changed against a basket of

major currencies on April 13 as traders waited for more

clarity on a possible Western military intervention in Syria.

The greenback rebound sharp-ly after a wobble at the start

of the week largely bene-fited from the release

of the March FOMC meeting minutes,

which suggested that policy officials see a greater risk of an inflation overshoot, meaning a faster rate hike path is possible.

PTI

INR Sees Sharp Volatility Against Pound, Euro & Yen

$100.26 per barrel but fell to $26.55 per barrel on January 20, 2016 when OPEC decid-ed to produce more. After it reversed its policy, the price of oil went up to $60 per barrel in July 2016. As is known, when global oil prices fell the Indian government did nothing to pass on the benefits to the public.

Taking longer time frame global oil prices have swung violently. In 2008, global oil prices ruled at $145 per barrel. This was just before the global economic recession peaked in 2009 and is an indicator about what high oil

prices can do to the world economy (although the recession was trig-

gered by collapse of the financial markets). For India, in the

good old days, how the econ-omy would perform was a gamble on the bounty of the monsoons. Now, it has be-come a gamble on global oil prices!

(Kingshuk Nag is the author of several best-selling non-fiction books and former Resident Editor of Times of India)

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18th - 24th April 2018 | 04

Talking about disasters is not considered good in our so-ciety. Rather, we are taught

to focus on the positives. This is why new and old investors are often perplexed when asked about their risk taking capacity. Those with large egos, like to think they are high risk takers. Those with a conservative mindset, never take risk. But the truth, as they always say, is in the middle.

Our risk taking ability is a measure of our comfort level with investments. However, the popular way of talking about risk is gen-erally linked and measured with reward being the proverbial carrot. So, we are taught that taking high risk means getting high rewards.

Unfortunately, this kind of risk-reward relationship explana-tion is built on half-truths. Risk doesn’t only mean reward; it also means accepting the probability of some loss. That is why your capacity to bear losses is a far bet-ter indicator of your risk-taking capacity. Let us find out why.

What if it doesn’tEverything is generally assumed to work smoothly. However, life is not short on surprises. When something doesn’t happen in the way it was planned, it has its own share of effects. We expect stock markets to go up. We an-ticipate salary hikes to continue. We expect bank deposits to be

hundred percent safe. We think gold will always become increas-ingly valuable. What if all or any of this doesn’t happen in the way you have envisioned? That’s called risk. In the wild chase for returns, never forget risk.

The risk of not meeting your ex-pectation is quite frightening. For instance, the danger of not having enough for retirement is scary es-pecially if you realise it when you are already 65. Having inadequate money for son/daughter’s higher education or marriage is a terrible truth if you calculate it just a few weeks ahead of it.

Risk as loss Our ability to bear and cope with losses is what tells us how risk-taking or risk-averse we truly are. It’s as simple as that.To assess your capacity to bear losses, ask yourself two simple questions.• How much loss can I tolerate?

The answer should be specific and a number in percent.

• How long can I accept the

loss? The answer should be a number in days, weeks, months or years.

Both answers are required. For instance, if you can tolerate 20 per cent loss it is important to know how long will you wait before panicking. If you can bear a 20 per cent loss to your initial investment for 1 year, it tells you that the moment the year is up --- you will start becoming jittery.

Understanding your risk bear-ing capacity will help you choose investments easily. Whenever you are sold an investment, tell the seller about your loss taking capacity.

It is also true that in the world of investments, risk is more or less a fact of life unless we are talking about government debt or guaran-teed fixed income.

Stock market contains the risk of capital erosion in the short, and medium term. However, the risk of capital erosion subsides if the investment spends more time in the market. There are no guaran-tees.

Fixed income contains a small amount of risk in terms of capi-tal erosion. In most cases, fixed income has some sort of a guaran-tee and that is why the returns are also capped.

Gold, history has showed, also contains a little bit of capital erosion risk if you buy it at an ele-vated price. There is no guarantee of returns.

Real estate, especially since it is held for long periods of time, limits capital erosion risk to some extent. Here too there is no guar-antee of returns, but seldom do investors sell realty at a loss unless it’s a fire-sale.

Crypto currencies like Bitcoin have huge amounts of capital erosion risk even in the short term. Plus, investors need to be comfortable with wild swings on a daily basis.

Happy Investing!The author is a personal finance journalist with over 13 years of experience

Confused About Your Risk-Taking Capacity?Understanding your risk-bearing capacity will help you choose investments easily. When you buy an investment, tell the seller about your loss-taking capacity

Kumar Shankar Roy

Ask the FinApolisI have completed 4 years in my current organisa-tion. As a private sector employee, my monthly deduction towards Employee Provident Fund (EPF) stands at Rs 2,500. My organization also pays similar amount towards EPF. Now, due to some personal exigency, I want to have a partial withdrawal from my EPF account. Kindly guide me whether I can withdraw it without any tax deductions.

-- Pradeep Ingale, Andheri (E), Mumbai

With 4 years of service, you can primarily withdraw for the purpose of purchase / construction of house / flat and acquisition of site, or meeting a medical exigency.

For the purpose of property, you can withdraw up to 90% of EPF balance (Employee’s share and interest on that + Employer’s share and interest on that) or the cost of the construction of property whichever is less. You are allowed only one withdrawal for this purpose during your entire employment. For buying land or site, the withdrawal amount can be 24 times of your basic wage. Your accumulated EPF balance must be more than Rs 20,000. If your spouse is also an EPF member, then the combined balance will be considered for the eligibility. The amount will be credited to a cooperative society, central government, state government or any housing agency under any housing scheme or any promoter or builders as the case may be, in one or more than one instalments, if the purchase is from any of these organisations.

A subscriber can also take EPF advance for med-ical treatment of self / family members without submitting any medical certificate. A self-declaration for this purpose is adequate.

Withdrawals after completion of 5 years of con-tinuous service in the EPF are tax free. But all withdrawals made (principal as also the interest) before completion of 5 years of continuous service are subject to tax in the financial year in which the with-drawal has been done as per following stipulations:

• If the employee’s services were terminated or the person is unemployed as a result of ill-health or the withdrawal is for covering medical expenses, withdraw-als will not attract tax.

• If the employee has submitted his/her PAN details to the EPFO authorities, 10% TDS (tax deduction at source) will be applicable. That said, if the total PF corpus is less than 30,000 when the employee is making the withdrawal, no tax will be applicable.

Col. Sanjeev Govilla (retd.) of Hum Fauji Investments answers reader’s queries on investments, taxation and personal finance. Do you have a question you want answered? email your question to feedback@thefinapolis.com

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By Col. Sanjeev Govilla

This new fiscal brings in motion some amended income tax laws applicable from the current year.

Let us discuss the major ones.

Benefit of Standard DeductionEvery salary earner as well as a pen-sioner will be entitled to a standard deduction of Rs 40,000 during the year. Pension from EPFO will also get it. The tax benefit for free medical reimburse-ment upto Rs 15,000 and transportation allowance upto Rs 1,600 per month are withdrawn from the current year.

Changes in Section 80 DFor health insurance, premium paid for more than one year was allowed as deduction in the year of payment till last year but from the current year deduc-tion proportionately for the year is avail-able. For senior citizens the deduction has been raised to Rs 50,000 from Rs

30,000. Enhanced deduction is available for all senior citizens for medical ex-penses if he does not have any medical insurance policy.

Increased deduction for bank interest for senior citizenTill last year, a deduction up to Rs 10,000 under Section 80 TTA for interest on savings account with banks, post office and cooperative banks was available. For senior citizens a deduction up to Rs 50,000 covering all interest received from banks, post office and co-operative banks on fixed deposits, recur-ring deposits or savings bank account is made available under new section 80 TTB from this year.

Long term capital gains provisionsAll long term capital gains made on sale of equity shares and units of equity oriented schemes fully exempt under Section 10 (38) are made taxable @ flat 10% beyond one lakh from current year.

However, profits accrued till January

31, 2018 will not be taxed. The market value of the shares or net asset value of mutual fund units as on January 31, 2018 will be taken as cost for computing long term capital gains.

The tenure of bonds under section 54 EC has been increased from three to five years and the benefits is now restricted

to long term capital gains on sale of land and building only which was available for all capital assets earlier.

Late fee for delay in filing returnsFrom the current year, you need to file your income tax return by July 31 unless you are have a business and are required to be audited under any other law, for which the due date is September 30. Earlier, there was no late fee if you failed to file the ITR by the due date. There was some provision whereby the assessing officer could levy a penalty of Rs 5,000 if you failed to file it within 12 months from the end of the fiscal after giving you an opportunity to be heard.

From now, you will have to pay a late fee if you miss the deadline. The late fee would be Rs 5,000 if the return is filed after the due date but by December 31. Beyond this, the late fee would be Rs 10,000. Late fee is Rs 1,000 if the total income does not exceed Rs 5 five lakhs.

The author is a CA, CS and CFPCM

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FinapolisFinapolisTheThe

18th - 24th April 2018 | 05

SENSEXY: Jilted Lover & Arrogant Investor

Hello Mr. Rao, remember me? I am Sensex. We met in 1979 in Bombay.

I was a teenage girl standing at the Bombay Stock Exchange stairs and you were walking past me towards that bank just opposite my exchange to deposit your savings. I had walked up to you urging you to embrace me, but you refused in disgust and had deposited your hard earned money in that bank that was offering 10% return. You were young too, all of 21 years and you had started earning a small salary. You shouldn’t have refused.

Over the next 10 years, we kept on crossing paths frequently but you always ignored me. The FD rates had gone up from 10% to 12% and you must have been thinking that the rise in rates would continue. But you overlooked the fact that I had grown from 100 to 1,000 in these years.

We met again in 1992, you were 34 years old; I asked you then too to take me into your arms. You snubbed me again. Never mind, there was a big scam masterminded by Harshad Mehta which brought me crashing from 4500 to 2000 and you had that smirk on your face which I will never forget.

I know you would talk about too many negative

things such as scams, bomb blasts, assassinations, geopolitical issues, government related issues, surging oil prices and the likes. You were too much worried and sceptical all along without realizing my potential. At least, you should have held my fingers if not lifted me up taking me into your arms. You did make a horrendous miscalculation and misjudge-ment. Didn’t you, Mr. Rao?

Today in 2018, almost 40 years later, you are 60 years

old and fragile, struggling to meet your retirement expenses.

You were too indulgent with your risk-averse attitude and fancying that when you get old, the deposit rates would be higher and you will retire rich, but what happened, you see? I have grown from 100 to 34000 in these 40 years and your deposit rates have fallen from 14% to 6%; I have given returns of 16% year on year; and your deposit has aver-aged under 8% in these years.

All you should have done was to believe in the possibilities of a growing India and the oppor-tunities that stock market was offering right at your doorstep. You could have invested small amounts over the years and you could have given your family a life they deserved and you could have had a handsome retirement corpus too.

Stop giving me that stare. From 100 to 34000 now I am all

curvy and vivacious and more people have started to follow me than before, they even chase me. I might be down at times for a few months or even a couple of years, but that’s my hibernation time. When I return, I return with vengeance and vigour; you can hate me but cannot afford to ignore me.

The author has written six books on investing and personal finance. He has 23 years of industry experience and six years in academics

1979 1979

1984

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1984

1992

2018

1992

2018

Savi

ngs i

n Ba

nk

Inve

stem

ent i

n St

ock

Mar

ket

11%

12%

6%

Mr X deposited `10,000 at age of 21 yrs in a bank

Not

e: C

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s m

ay d

iffer

At the age of 60 yrs, Mr X saves from the bank (@ 8%)

` 2,01,153 ` 32,34,838

At the age of 60 yrs, Mr X would have earned from the market (@16%)

If Mr X chose to invest `10,000 in stock market

100

260Points

4500Points

34000Points

Points

Balaji Rao

Balwant Jain Standard DeductionsAvailable to• Individuals against salary

received • Pension from employer and

under Employee Pension Scheme

• Pension from annuity purchased by employer

Not available to• Pension from annuity

purchased by individual or under NPS

Comparison of savings and investment

File Tax Returns on Time or Pay Penalty

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18th - 24th April 2018 | 06

Mutual Funds May Be Sold On eCom Platforms: AMFI CEO

The Union Government has imposed a 10% LTCG tax on equity-linked mutual fund schemes. Do you feel this will be a dampener for future invest-ments and reduce the attractiveness of equity-linked SIPs?The mutual fund industry is registering a robust growth and I think the 10% tax will not affect much. We saw a little bit of profit booking before April 1 and we expect this money to re-enter in April. The mutual fund industry should grow substantially well. The tax is a small one. It’s only a 10% tax. It will not affect the growth of the MF industry.

Last fiscal, the industry has seen more than 25% growth. Will this momen-tum be sustained in the current fiscal?The growth of 25% will be a sustain-able one for the next five years despite all factors.

The geographical spread of mutual fund industry is skewed with sub-op-timal penetration in large states like Uttar Pradesh, Madhya Pradesh and Andhra Pradesh among others. What is AMFI doing to ensure an even dis-tribution of mutual fund industry?I agree that the geographical penetra-tion is very low and hasn’t gone much beyond top five states. I would say that a lot more work needs to be done. The investors’ awareness programme, which AMFI, is running is at least making some difference. The ‘mutual fund sahi hai’ campaign which we are running in the audio-visual media is making people aware about the MF industry.

Now, the next step is to convert them into mutual fund investors. That’s where the distributors and the Inde-pendent Financial Advisors (IFA) have a role to play. In addition to this, the awareness programme which AMFI is running on the ground will slowly show some results. We are also asking the Asset Management Companies (AMCs) to do the same thing. I am quite sure these steps will bring in a

lot of money over time into the fold of mutual funds. Apart from feet on the street, technology will also play a crucial role. We are also exploring whether we can sell MF products in e-commerce platforms. Players like Amazon are very much keen on such a tie-up.

Will a tie-up with Amazon or any other e-commerce player happen in the current fiscal?Nothing concrete has emerged as yet. There are a lot of interests and hope-fully, something will happen. We have had a preliminary discussion with Am-azon. Meanwhile, we have tied up with Google as part of our digital marketing initiative. We expect all these steps will improve the investors’ base. Sebi (Securities and Exchange Board

of India) has recently reduced the additional expense ratio to improve penetration of mutual fund industry. Earlier, it had stopped giving addi-tional commission to distributors from B-15 cities and directed that this commission be given to distributors beyond B-30 cities. Do you feel this will hurt the growth of the industry?What Sebi has done is that they have said additional commission will now

be provided to distributors beyond B-30 cities. So, you will actually see the penetration of mutual fund in-vestments into those cities. You will also see more and more new inves-tors coming into the system. There is enough wealth in tier-III and tier-IV cities. Therefore, it is a step in the right direction, which will help in increasing awareness among investors. Mutual fund being a wealth creator, we expect the penetration to grow at a rapid pace.

The share of equity in the overall asset base of mutual fund industry has increased, but it has declined for debt schemes due to less retail participa-tion. What are your views on it?If you look at Fixed Income Products (FIPs), they have really grown. The bal-anced funds and the debt funds have

grown, but not to the extent of equity fund levels. Equity products have out-performed because the equity market has grown at a rapid pace. Sensex has grown at a very rapid pace. However, fund managers are advising people that a little debt is good for the portfolio. With all this communications from the mutual fund houses, you will see debt funds coming back in flavour. But, equity will always have an upper hand. Traditionally in this country, equity is much larger in size than debt.

Direct plans have seen rising popu-larity in the recent years. However, AMCs don’t seem to be so keen in pushing direct plans due to pressure from distributors. As a Self Regulatory Organisation (SRO), have you come across such instances?We haven’t come across any such cases. Direct plan as a concept has been launched 3-4 years back and from that level, total asset base through direct plan route has now grown to 40%. Go-ing ahead, the upward trend of direct plans will continue. But, you can’t say that the regular ones will die down because, mutual fund remains a push product not a pull product. In devel-oped markets also, regular plan was the frontrunner and slowly direct plans had caught up. In India’s case, both will coexist.

Are you working with Sebi for any further disclosures for the mutual fund industry?I think, Indian mutual fund industry is one of the most transparent indus-tries of the country. Sebi has been very proactive in ensuring that the transparency levels remain at exceed-ingly high level. I don’t see any further requirement on this front. If you com-pare mutual fund industry to any other sectors in the country, you will see that it is the most transparent.

Despite imposition of Long-term Capital Gains Tax (LTCG) on equity-linked mutual fund schemes in this year’s budget, Chief Executive of Association of Mutual Funds in India (AMFI) N.S. Venkatesh is of the opinion that the industry will remain on a high growth path in coming years. In a freewheeling chat with Debasis Mohapatra of The Finapolis, Venkatesh said that selling of mutual fund products on the e-commerce platform would soon be a reality. Excerpts from the interview:

N S Venkatesh

Chief Executive, AMFI

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Markets Your Personal Finance Advisor

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18th - 24th April 2018 | 07

Our analysts pore over technical charts to offer some smart trading tips for the short term

8KMILES

8KMILES has witnessed a spectac-ular rally from its September 2017 lows of 364.7 to its all time high

of 1029.95 levels in December 2017 and from there retraced by more than 61.8% of the said rally and bounced back to settle above 50 % Fibonacci retracement level indicating end of cor-rection in the stock. The stock has wit-nessed a V shaped recovery rally with jump in volume suggesting the opti-mism of investors in the counter. After that the stock went in to a prolonged consolidation phase and remained firm despite a recent selloff in the broad market. However the increase in volume activity in recent times suggests that the consolidation was used by investors to accumulate the stock and the stock is now poised for a fresh leg of rally from these levels.

Points of observation � On the weekly charts, the

stock is trading above all of its 21/50/100/200 period Exponential Moving Averages levels indicat-ing the positive momentum in the counter for all major time frames.

� Among other leading indicators parabolic SAR is trading below the current market price and suggests a positive trend in the counter on daily charts. Another leading indica-tor Heiken candlestick also indicate bullish trend in the counter.

� Among the momentum indicators MACD is trading above the signal line in weekly charts indicating positive momentum in the stock on medium to long term perspective.

� The stock has been consolidating above the mean in Bollinger bands in monthly charts and started to moving towards the upper Bollinger band indicating positive momentum in the stock.

� On fundamental side, 8KMILES Software Services Ltd is an internet company that is focused on helping enterprise and SMBs integrate cloud computing into their IT and busi-ness strategies.

� Considering the changing landscape

of requirements in healthcare data management, the new cloud-based Electronic Health Record (EHR) has seen a rapid growth in demand for various reasons.

� With the existing demand for cloud EHR solutions, it is expected that the market of EHR will be about $30 billion by 2020 and is only expected to grow further.

� This demand is primarily driven by increased need for anytime-any-where accessible software solutions that reduce errors and increase ease of use.

� The company is a virtually debt free company. It has consistent profit growth of 97.11% over 5 years. It also has a good return on equity (ROE) track record of 32.11% in 3 years.

� Hence we recommend medium term investors to go long in 8KMILES above 754 levels for a target of 987-1029. Investors are advised to aver-age the stock around 640 levels if it comes down and keep a strict stop loss at 585 levels on closing basis.

� The time frame for this recommen-dation is around 6-9 months.

CMP Rs 736.10

SL Rs 585

TP Rs 987-1029

STOCKTECHNICALS

Silver Prices Miss the Bling

Silver prices have been defying all expectations of traders and inves-tors who have been anticipating

higher prices for weeks and months now. Gold prices, which are correlated to silver, have been on a sprint in 2018, while silver, which bears a property of being more volatile than gold, has not even managed to do a partial catch up till date. One factor which clarifies this underperformance is the ongoing cor-rection in the industrial metals. Silver is an industrial metal and is mined with base metals like lead and zinc

Silver prices edged up briefly after the US Federal Reserve announced the first rate hike of the year on March 21 and signaled at least two more increases in 2018. The Fed lifted the target federal funds rate from 1.5 per cent to 1.75 per cent, sending the US dollar into a downward spiral and slightly lifting the price of silver.

Other macro factors have also supported silver. The Official NBS Manufacturing PMI in China rose to 51.5 in March of 2018 from 50.3 in the previous month and above market con-sensus of 50.5. It is the highest reading

since December 2017, as output (53.1 from 50.7 in February) and new orders (53.3 from 51.0) increased at a faster pace while sentiment stood at 3-month high (58.7 from 58.2).

On the other hand, supply has not matched the pickup in demand. Overall silver mine supply from top three producers — Chile, Mexico and Peru — fell 13 mt in January versus the same month last year. Even though Mexico is likely to experience an increase in silver mine supply in 2018, declining produc-tion from other leading countries may curtail overall world supply.

Sales of U.S. Mint silver coin for March fell to their lowest in 11 years, government data showed. March

American Eagle silver coin sales dropped 36 per cent from the first quarter of 2017, when close to 8 million ounces were sold. However, silver coin sales during the first quarter of the year more than doubled from the same peri-od in 2017, when 2.2 million coins were sold. The speculative net long positions by the large traders have reached the lowest in 15 years, suggesting that the sentiments have also eventually turned sour. While these factors show that silver is highly undervalued, it still re-mains to be seen when the white metal will gain momentum.

Himanshu Gupta is the chief market strategist at Karvy Comtrade

Nickel MCX Apr

Buy TP SL

Rs. 900-904 Rs. 960 Rs. 870

Zinc MCX Apr

Buy TP SL

Rs. 202-203 Rs. 212 Rs. 197

Natural Gas MCX Apr

Buy TP SL

Rs. 177-178 Rs. 192 Rs. 171

Jeera NCDEX May

Buy TP SL

Rs. 15480-15500 Rs. 16300 Rs. 15220

Refined Soy Oil NCDEX May

Sell TP SL

Rs. 779-780 Rs. 760 Rs. 790

Cotton MCX Apr

Buy TP SL

Rs. 20670-20700 Rs. 21300 Rs. 20450

CAll For ACtion

Himanshu Gupta

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