AXA to increase its stake in the Insurance business.

Bharti Enterprises and AXA life has confirmed that It would increase its stake from 26% to 49% in its life and general insurance business. The company has presently two joint ventures with Bharti , Bharti AXA Life Insurance and Bharti AXA General Insurance.  The increase in stake would further enhance Bharti’s market dominance in the Insurance business and would help them augment their portfolio in this field.

In a statement issued by Rahul Bhatnagar, Managing Director & CFO, Bharti Enterprises, he said “This is a significant milestone in the journey of the Bharti-AXA joint ventures, and underlines the partnership’s long-term commitment to the Indian market”.

According to Jean-Louis Laurent Josi, CEO of AXA Asia, “Our long-standing partnership with Bharti, a leading Indian conglomerate, positions us ideally to succeed in this highly promising market”.

The company has recorded a premium of 4.7 billion in fiscal year 2014-15 and has been growing aggressively with 28% growth rate.

Indian slated to be a double digit economy soon.

According to Home minister Rajnath Singh India is slated to become a double digit economic power soon. Speaking at a press conference Mr Singh said that India has become one of the hottest destination for Foreign Investors. According to him the present government has taken substantial steps to improve the economic condition of the country and followed the path set by Atal Bihari Government in 2004. Taking a dig at previous government , Mr Singh said that he was confident that India would reach a double digit growth soon and bureaucracy in financial matters was a thing of past .

But after 2004, even though there was growth initially, the momentum lost gradually. The country could not achieve the desired growth. They could not match the momentum achieved by the Vajpayee government. By 2014, the economic condition of the country further deteriorated. When the Modi government assumed charge, you all know what was the economic condition of the country. “India has become the hot favorite destination for foreign investors. I am sure in a few years, India’s economic growth would in double digit”

The government has made many structural and procedural reforms in order to crub corruption and bureaucracy from financial matters and have ensured that the government is in a path of economic growth in the coming years.

There is a sense of confidence among investors. This government means business, this government is business friendly, this government is investors friendly, a decisive government, India will soon become one of the five top economies in the world. We are trying to make common people part of the development process,” he concluded.

Dell Ventures to invest $300 million in Indian Startups.

Dell ventures , the venture capital firm of Computing giant Dell Is planning to invest in Indian startups as part of its strategy to get an stronger footprint in India. Dell believes that by investing in Indian stratup ecosystem they would be able to gain a global footprint and the move would help them cater the Asian market well. The company plans to formally announce this move soon and officially announce the strategy to move in this direction.

In an interview given to ET , Amit Midha, president of Asia-Pacific and Japan said “”We’re investing to innovate in India, to innovate in Asia, to create an outreaching ecosystem in Asia which is different. We announced Dell Ventures in China, we announced a $125-million investment in China and we’ve also announced a continued expansion in India, from a 27,000-people perspective.”

“We are looking at cloud, IoT (internet of things), big data and security. We like to look at startups that have gone beyond the 5-people operation stage. Otherwise it becomes too much of a headache for us. The company needs to have some sort of momentum, some customer traction — we are not an accelerator, we are more interested in companies that are growing their businesses. And our involvement will help them grow even faster and also give them credibility points”

The investment arm Dell venture was established in early 2000 but has been in a dormant state in recent times. The company would like to focus on startups which are creating solutions in newer technologies such as cloud computing, security and analytics.They would invest in both early stage and later stage companies.

According to Midha companies iconic founder Michael Dell is very keen to invest in Indian market and would monitor the deals very closely.

Indian Aviation stock on a high with Spice Jet Leading The Show.

Spice jet has becomes world’s top performing aviation stock in last one year by increasing four fold from its current value. Aviation industry has benfitted to a greater extent in recent times due to lower crude oil prices and a big boost in passenger traffic.

The company outperformed its international customers like El Al Israel Airlines, Hawaiian Holdings, China Southern Airlines and Qantas Airways. Among other aviation players , the freshly listed Indigo also realized a 42% increase in its stock from the day of its filing on the stock exchange. All the aviation companies are positive that they will have a happy end to the year with increase in passenger traffic and advance booking numbers which are on a high. The management is on high because of the surge but various research companies advice not to go on a buying spree as the stock has risen sharply in recent times and would correct soon.

In an interview given to ET G Chokkalingam, founder and managing director of Equinomics Research & Advisory said “I would advise existing investors to book profits in phases in SpiceJet stock, while newcomers should avoid this company because the stock has already run up sharply. Some of the global airline stocks have seen re-rating because of lower jet fuel prices, while domestic airlines are benefiting from the fact that India is becoming the fastest-growing airline market.”

Lets hope that this blue run continues for a longer period and help investors earn some good money in the near future.

 

Nippon acquires 23% of Reliance Life Insurance.

Japan’s insurance major Nippon Life Insurance announced its plans to invest in Indian markets . The company acquired 23% of Reliance Life insurance for about Rs2,265 crores. With this acquisition company now holds 49% of the Indian insurance arm. This is the upper limit defined by the Indian government for a foreign player to Invest in an Indian Insurance firm.

The acquisition comes at time when the insurance sector around the world is reeling under stiff economic pressure. Reliance managed a strong valuation of Rs10000 crore with highest EV(Embedded Value) among its peers. The total investment of Nippon after this deal has raised to Rs 8,630 crore in Reliance Life Insurance cooperation.

Reliance group chairman Mr Anil Ambani said “We are delighted that the outstanding relationship between our two companies has now grown into an equal partnership, with Nippon increasing their stake – first, in our asset management business, and now, in our Life Insurance business – to 49 per cent.”Both the boards have approved the deal and it would materialize post regulatory approval

“This additional investment represents not only the past efforts and initiatives, but also the good relationship between both companies going forward, and we are pleased to be able to further strengthen this partnership in various fields,” Yoshinobu Tsutsui, president, Nippon Life Insurance said.

Nippon first entered the Indian insurance foray with a 26 % stake in Reliance Life Insurance at 3,602 Crore in March 2011.

Nippon has also agreed to invest in Reliance capital asset management. The company has planned to acquire 14% stake at Rs1,196 Crores.

Ola, now worth $5billion,raises 500 million

Indian Taxi app unicorn Ola, has raised 500 million from a series of new and existing investors.The series F funding was lead by investor Baillie Gifford and existing investors like Tiger Global,Falcon edge, Softbank group and DST global.With this amount Ola has raised a total of $1.4billion from investors.The company plans to use the money to further accelerate in the existing markets and penetrate in more cities and town.The company’s app has already crossed more than 1 million in downloads and has recieved more than 1 billion bookings so far.The company is present in more than 100 cities across India.

The funding comes at an intersting time when the global market leader Uber, has planned to invest $1billion to tap the growing Indian internet population.Uber targets only high end customers in the country and is present only in 22 cities.
“As we pursue our mission to build mobility for a billion people, we are excited about bringing onboard partners who can help us get there faster,” Bhavish Aggarwal, co-founder and CEO of Ola said in a statement. “We will continue to build for the local market through innovative solutions like Ola Share, Ola Prime and Ola Money, as we grow the mobile ecosystem in India.”

According to Uber it plans to surpass its total ridership in US.The basic difference between the two services was that OLA allowed cash payement to its customers while uber only focused on the in app payments.Both the companies have come to common terms if we talk about payments.OLA recently launched its in app wallet named OLA money which allows customers to makepayments in app.

Single Stock Sucide .

So are you a good stock picker ? Do you think the buy and hold strategy works ?Yes it might work well and do wonders in bull market scenarios but there is a serious chance of losing all that in a fragile market environment like the one we are facing these days .

What the future hold for us ?

The bad news is that the next few years will be bad for those who worked on the buy and hold strategy . With the natural forces coming into play deflation will be the major reason for a downward spiral in the future market scenario .So the best way to deal with this deflation is to meet it head on . Work on a strategy where the downward spiral works for you and you grow orgnically .With the decrease in commodity prices in global market there are very bad signs of deflation and very chances to grow organically .

Short Risks

So the short invidual stocks are the solution ?While these present a good oppurtunity by there is stil a significant risk.And if you are shorting a wrong industry it will result to a catastrophy .And if by any chance the small company you are shorting gets acquired or bundle up ,you might devalue yourself 25% .

So What should one do ?

Well the answer is simple ,Go for a two point strategy .

First hold the most potential . i,e research the S&P and determine the stocks that have low or high quality and will help  you make a balanced protfolio . But keep in mind the health of the industry before chosing this route . So even if you choose the weakest company in the strongest Indutry it will outperform a very strong company in a weak industry .

The other option is to invest in the exchange traded funds or ETFs.But keep in mind that if not experienced please invest in any kind of leverages or inverses ETFs.They come with a expense ratio , i,e they are rebalanced daily and extremely volatile . So for an example a certain leveraged ETF is good at Rs200 it will be good at Rs150 or 140 . If your research is good then this will be the right time to buy the shares rather than panicking and selling them.However most retail investors panic at this stage and strart selling these shares at a throw away prices to minimize the risk .

The Bottom Line

Just go ahead and buy the shares when the market is not in your favour . Fill your basket with as many eggs as possible and stick with the areas of market with will give you the most resiliency /

What are Hedge Funds ?

A hedge fund is a fund that can take both long and short term leverages and buy and sell undervalued securities , trade options and bonds and invest in almost in any oppurtunity where it sees an impressive gain .The primary aim for a hedge fund is to reduce voltality and risk while attempting to preseve capital and deliver positinve results to its investors .

Hedge funds are alternate investment which may use different number of strategies to earn active returns for their investors.They may use the derevative leverage in both the domestic and international markets with the goal of generating high incomes .Since they have a low correlation with traditional protfolios consisting of equites and bond they are a good medium of diversification for an investor .